Phillips County Public Housing AgencyLocal Government

Department of Housing and Urban Development Costs Federal Assistance Listing No. 14.871 – Housing Choice Voucher $ .00 2022-001 Tenant Files Condition and Criteria: The Authority’s purpose for existence is providing decent, safe and affordable housing to low-income persons. As such the Authority prepares a file for each admitted family, which contains information necessary to determine eligibility for assistance and calculations of rent assistance to be paid on the family’s behalf. HUD regulations prescribe the content of these family files. These requirements consist of the following: a. As a condition of admission or continue occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility. b. For both family income examinations and reexaminations, obtain and document in the family file third party verification of: (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent. c. Determine income eligibility and calculate the tenant’s rent payment in accordance with HUD regulations. d. Select tenants from the public housing waiting list in accordance with the PHA’s tenant selection policies. e. Reexamine family income and composition at least once ever 12 months and adjust the tenant rent and housing assistance payment as necessary. Population and Items Tested: Testing of the thirty-seven files revealed the following deficiencies: a. One file lacked proper utility allowance documentation. b. One file revealed an incorrect Housing Assistance Payment. c. One file in which a lease and housing assistance payment contract was not executed. Auditor’s Recommendation: A thorough review of tenant files should be performed for the purpose of eliminating the deficiencies. This is a repeat finding. Grantee Response: We will comply with the auditor’s recommendation.

2021-001 Tenant Files $ .00Condition and Criteria: The Authority?s purpose for existence is providing decent, safe and affordable housingto low-income persons. As such, the Authority prepares a file for each admitted family, which contains information necessary to determine eligibility for assistance and calculations of rent assistance to be paid on the family?s behalf. HUD regulations prescribe the content of these family files. These requirements consist of the following:a. As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility.b. For both family income examinations and reexaminations, obtain and document in the family file third party verification of: (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent.c. Determine income eligibility and calculate the tenant?s rent payment in accordance with HUD regulations.d. Select tenants from the public housing waiting list in accordance with the PHA?s tenant selection policies.e. Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary.Population and Items Tested: Testing of the thirty-one files revealed the following deficiencies:1. One file lacked proper utility allowance documentation.2. One file revealed an incorrect Housing Assistance Payment.3. One file in which the HUD 50058 family report was not in the family?s file and available for review.4. Two files lacked proper documentation of eligibility income.Auditor?s Recommendation: A thorough review of tenant files should be performed for the purpose of eliminating the deficiencies.Grantee Response: We will comply with the auditor?s recommendation.

Finding 2020-003 ? Information on the federal program: CFDA 14.871; U.S Department of Housing and Urban Development; Housing Choice Voucher Program; annual contributions contract number AR-223VO; fiscal year ending December 31, 2020. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Internal controls over disbursements including transactions relating to allowable costs/cost principles, budgetary principles and proper supporting documentation. ? Condition: My tests of disbursement transactions revealed deficiencies and/or questioned costs in supporting documentation for CARES Act expenditures. There were two disbursements form our sample for CARES Act program expenditures that were not supported by a verifiable vendor invoice. The hand written invoices provided appeared to be created by the PHA, from a generic sequentially numbered document and paid to individuals, not verifiable businesses or contractors. The PHA did not provide a verifiable business name or EIN for the payees. These services were provided for moving office furniture, which does not appear to be a COVID driven cost. Additionally, budgeted salaries were exceeded for the Executive Director position by $3,838, the Assistant Executive Director by $3,407, and the Secretary/Receptionist by $3,376 ? Questioned costs: $11,196. ? Context: Our disbursement sample included 67 items. ? Effect: We were not able to determine that CARES Act fund were expended in accordance with allowable costs/cost principles requirements. Salaries exceeded the amounts approved by the Board. ? Cause: Weakness in internal controls over allowable costs. ? Identification as a repeat findings: This is not a repeat audit finding. ? Recommendation for Corrective Action: Properly document transactions over program expenditures with a vendor provided invoice to support expenditures in accordance with program requirements. Ensure that payroll expenditures are within the annual budgeted amounts. ? Views of Responsible Officials and Planned Corrective Actions: We will provide stricter internal controls over disbursement transactions. We continue to work to obtain the required documentation and implement proper training programs on federal program requirements. Management will strengthen its control system over disbursements relating to allowable cost and cost principles. We will obtain the required proper supporting documentation for these programs on all future transactions. We will also ensure that expenditures are within budgeted amounts. We will have these procedures are in place as of November 1, 2021.

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