Housing Authority of East Baton Rouge ParishLocal Government

2024-002 ALN 14.871 – Housing Voucher Cluster – Activities Allowed or Unallowed Condition and Criteria: The Authority operates several distinct programs. Allocated expenses are paid from the Public and Indian housing funds and reimbursed using inter-program accounts. Reimbursement between programs was not made timely and has caused an increase in inter-program receivables and payables over time. Cash management is the process of managing the Authority to optimize its use of funds. This process involves the timing of receipts and disbursements to assure the availability of funds to meet expenditures and to maximize the yield from the investment of temporary surplus funds. The Authority incurred unallowable activities relating to the handling of inter-program balances between the various programs due to poor cash management controls. Amount of Questioned Costs: None Context: The Authority’s management failed to ensure inter-program advances were reimbursed properly and timely between its various federal and nonfederal programs. Programs with excessive inter-program balances include the Public Housing Operating Fund, Housing Choice Voucher, Revitalization of Severely Distressed Public Housing, Choice Neighborhoods Planning Grants, and COCC programs. Cause: The Authority has a lack of internal controls over cash management and has not been regularly monitoring and reconciling inter-program activities between their various federal and nonfederal programs. Effect: Various programs do not have sufficient unrestricted cash to satisfy inter-program balances. The lack of cash to cover inter-program imbalances can limit the liquidity and operational flexibility of the program. There is an increased risk of non-compliance with federal guidelines. Auditor’s Recommendation: We recommend that the Authority settle inter-program balances on a monthly basis and implement a process to review net cash balances during its budgetary procedures to reduce the risk of further noncompliance. Further, the Authority needs to implement stricter processes around inter-program balances to ensure the Authority can properly assess cash balances at a program level. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation.

2024-003 ALN 14.871 – Housing Voucher Cluster – Eligibility Condition and Criteria: The Authority is required to adhere to eligibility compliance requirements for all tenants participating in the housing program. Specifically: • Birth certificates, social security cards, and citizenship declaration forms must be maintained for all tenants as part of the eligibility documentation. • The Enterprise Income Verification (EIV) system must be used at least annually to verify tenant income and prevent overpayment. • The calculation of tenant assistance payments must include all sources of income, including child support payments. • The utility allowance amount reported on the HUD-50058 form must reflect accurate and current data in accordance with HUD requirements. During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Amount of Questioned Costs: None Context: During our testing of a sample of 40 tenant files, it was noted that 11 files did not meet eligibility compliance requirements. • 2 instances of files missing birth certificates, social security cards, or citizenship declaration forms. • 3 instances where an EIV report was not ran within the current year. This is required to be produced at least once annually. • 1 instance where the assistance payment was incorrectly calculated as child support payments were not included in the tenant's income. • 5 instances where the Authority did not report the correct utility allowance amount on the 50058 forms. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Auditor’s Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for the eligibility provision and HAP calculations are met. We also recommend that management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation

2024-004 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Additionally, HUD requires PHAs to accurately report financial and leasing data in the Voucher Management System (VMS) and ensure that this data reconciles with the Financial Data Schedule (FDS). Proper reconciliation between these reports is necessary for accurate financial reporting and compliance with HUD funding requirements. During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 6 out of 40 files tested. Additionally, the Authority did not properly reconcile the Voucher Management System (VMS) report to the Financial Data Schedule (FDS). Discrepancies were noted between the two reports, indicating a lack of proper reconciliation procedures. These inconsistencies could lead to inaccurate financial reporting and potential noncompliance with HUD requirements. The differences may be due to errors in data entry, timing issues, or misclassification of financial transactions. Amount of Questioned Costs: None Context: During testing of a sample of 40 HUD-50058 forms, it was noted that 6 forms were not accurately prepared. • 1 HUD-50058 form incorrectly calculated the amount of assistance received as child support payments were not included in income. • 5 HUD-50058 forms reported the incorrect utility allowance amount. The VMS data collection report contained several material variances from the unaudited FDS submission. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Additionally, the Authority lacked a structured reconciliation process between the VMS report and the FDS, leading to reporting discrepancies. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially affect the determination of HAP funding. Furthermore, the failure to reconcile the VMS report to the FDS could result in financial misstatements and impact funding calculations. Auditor’s Recommendation: We recommend that the Authority performs quality control reviews on the 50058 submissions to ensure timely and accurate reporting. Additionally, the Authority should implement a reconciliation process to ensure that the financial data reported in the VMS aligns with the FDS. This process should include periodic reviews, detailed variance analysis, and appropriate documentation to support reported amounts. Staff should receive training on proper reconciliation techniques and HUD reporting requirements to prevent future discrepancies. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation

2024-005 ALN 14.871 – Housing Voucher Cluster – Special Tests – HQS Enforcement Condition and Criteria: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements. Amount of Questioned Costs: None Context: During testing of a sample of 40 units for HQS enforcement, it was noted that 6 files did not comply with compliance requirements. These tenants who failed inspections were missing HUD-52580-A inspection forms. We were unable to obtain sufficient evidence that these failed HQS inspections were followed up with a reinspection within the allowed numbers of days or that the HQS inspection had finally passed at some point. Therefore, we were unable to determine if the Authority took proper steps to abate Housing Assistance Payments or enforce family obligations when appropriate. Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements. The Authority was transitioning to a new data collection system and during this period of transition, inspections were written down on the back of letters & previous inspection reports. The actual prescribed HUD inspection form did not exist for these failed inspections. Effect: The Authority is not in compliance with federal regulations regarding HQS inspections. Auditor’s Recommendation: We recommend that management review their controls for conducting HQS inspections and ensure compliance standards are met. We also recommend that staff receive appropriate training to be able to navigate the new software system properly. Lastly, we recommend that the Authority contacts the software vendor or IT service to resolve any remaining issues with the software system. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/22-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements. Questioned Costs: None Context: During testing of a sample of 60 units for annual HQS inspections and 26 units for HQS quality control (QC) re-inspections, it was noted that 13 files did not comply with compliance requirements.  3 instances where the housing authority failed to perform biennial inspections of a unit.  10 instances where the housing authority failed to conduct the quality control re-inspection within 90 days of the initial inspection. Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements. Effect: The Authority is not in compliance with federal regulations regarding HQS inspections. Repeat Finding: No Recommendation: We recommend that management review their controls for conducting HQS biennial and quality control re-inspections and ensure compliance standards are met. Views of Responsible Officials: There is no disagreement with the audit finding. Previously, staff used a 90-day window to select Quality Control samples. Doing so caused some QC inspections to be completed past the regulatory time period. Going forward, staff are selecting the sample size from a 45-day window. This allows sufficient time to complete the QC inspection within the regulatory time period.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/22-9/30/23. Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA’s denial of assistance. The PHA must schedule and send written notice of the informal review within 30 business days of the family’s request". Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority’s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant’s request. Questioned Costs: None Context: During testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements.  1 file where the housing authority failed to grant informal review at applicant request. Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed. Effect: The Authority is not in compliance with their administrative plan and HUD requirements. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003. Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request. Views of Responsible Officials: There is no disagreement with the audit finding. The Agency hired a dedicated Hearing Officer following last year’s audit. Unfortunately, during the period in question, the Hearing Officer went on maternity leave and then subsequently left the position resulting in a delay in completing hearings and reviews. The Agency has since contracted with a 3rd party to conduct hearings and reviews in a timely manner.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/22-9/30/23 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). The PHA must do the following: (1) 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 (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2) an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities. Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Questioned Costs: $7,936 Context: During our testing of a sample of 60 tenant files, it was noted that 20 files did not comply with compliance requirements.  1 instance where the income reported on the 50058 were not supported within the tenant file.  2 instances where the expenses reported on the 50058 were not supported within the tenant file.  3 instances where the housing authority failed to calculate the correct HAP/TAP  19 instances where the housing authority did not review the family income, assets and expenses on an annual basis. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of tenant rent, HAP and verification of the tenants income. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004. Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants and HAP calculations are met. We also recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 10 files on a monthly basis. Agency working with Human Resources contractor to fill open staff positions.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/22-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 2 out of 40 files tested. Questioned Costs: None Context: During testing of a sample of 60 HUD 50058 forms, it was noted that 2 files did not comply with compliance requirements.  1 HUD-50058 form was not submitted into the PIC system within the regulatory period of 90 days.  1 HUD-50058 form was submitted into the PIC system, however, it returned with a fatal error that was not corrected by the housing authority. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005. Recommendation: We recommend that the person assigned to submit the 50058s to PIC assures a quality control review is performed on the submissions to ensure timely and accurate reporting. Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 50058 submissions to PIC each month to ensure that all submissions are accurate in PIC. Additionally, the Agency is transitioning to Yardi software which should eliminate many of the submission issues caused by current enterprise software.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/23-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Interfund receivables are recorded on FDS line 144 (Inter program – due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects – Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)). Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund between programs. Questioned Costs: Unknown Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,571,589. This is a result of the Authority using a revolving fund for expenses. Cause: The Authority failed to properly monitor and reconcile its revolving fund between programs. Effect: The Authority is not in compliance with requirements regarding use of operating funds. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-010. Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level. Views of Responsible Officials: There is no disagreement with the audit finding. There are procedures in place to settle interfunds if possible.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2023 Award Period: 10/1/22-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The formula income is used to calculate the Operating Fund Revenue for each PHA. This calculation is generally based on prepopulated data calculated by HUD. However, in some cases Formula Income is not prepopulated. For further guidance review Formula Income Guidance the Operating Fund Web Page, the Annual Operating Subsidy Processing Notice and 24 CFR 990.195(d). Condition: The HUD 52723 forms used for calculating subsidy contained errors. The Authority reported PILOT balances they did not have. Questioned Costs: $91,552 Context: The Authority is required to complete HUD 52723 forms as part of their process of applying for subsidy. During this process, the Authority reported PILOT balances erroneously. Cause: The Authority failed to maintain proper controls over their HUD 52723 forms. Effect: The Authority received additional HUD funding in excess of what they would have otherwise received. Recommendation: We recommend the Authority reviews their controls over submitting forms to HUD to ensure they contain accurate information. Views of Responsible Officials: There is no disagreement with the audit finding. New CFO is preparing a Subsidy Calculation procedure so new staff will be aware of what is eligible and non-eligible transactions for preparing forms.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per (24 CFR sections 982.158(d) and 982.404), For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations. Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements. Questioned Costs: $25,491 Context: During our testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 instance where a unit failed inspection and there is no documentation that the unit ever passed. Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection enforcement requirements. Effect: The Authority is not in compliance with federal regulations regarding inspections. The Authority paid HAP expenses for units that do not pass guidelines. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: We recommend that management review their controls for conducting follow up inspections on initially failed home inspections and ensure compliance standards are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA?s denial of assistance. The PHA must schedule and send written notice of the informal review within 30 business days of the family?s request". Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority?s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant's request. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 file where the housing authority failed to grant informal review at applicant request. Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed. Effect: The Authority is not in compliance with their administrative plan and HUD requirements. Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request. Views of Responsible Officials: There is no disagreement with the audit finding

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). The PHA must do the following: (1) 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 (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant?s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, ?Special Tests and Provisions ? Public Housing Waiting List?) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Questioned Costs: Unable to determine, projected over $25,000 Context: During our testing of a sample of 40 tenant files, it was noted that 16 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 7 instances where the income reported on the 50058 were not supported within the tenant file. ? 4 instances where the expenses reported on the 50058 were not supported within the tenant file. ? 8 instances where the authority failed to calculate the correct HAP/TAP ? 9 instances where the housing authority did not review the family income, assets and expenses on the annual basis. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of the rent and verification of the tenants income. Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) ? The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA?s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058?s into the PIC system for 5 out of 40 files tested. Questioned Costs: Unable to determine. Context: During testing of a sample of 40 HUD 50058 forms, it was noted that 5 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 HUD-50058 forms were not submitted into the PIC system Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews their standard procedures to ensure the proper forms are submitted to the PIC system. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The PHA?s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes. such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reasonable rent requirements. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 6 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the comparison/determination of reasonable rent was missing, or the report was for a different amount requested. ? 6 instances where the determination of reasonable rent was done after the effective date of the 50058. ? 2 instances where the worksheet and Certification of Rent Comparability form was missing the signature of housing specialist or housing authority representative. ? 5 instances where the landlord and/or tenant was not notified of the rent increase. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over reasonable rent requirements. Effect: The Authority is not in compliance with federal regulations regarding determining reasonable rent for units. This could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews its procedures to ensure controls over the reasonable rent process. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $53,240 Context: During testing of a sample of 25 disbursements, it was noted that 7 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 1 instance where the documentation provided was not approved prior to disbursement ? 1 instance where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $17,793 Context: During testing of a sample of 25 disbursements, it was noted that 11 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 6 instances where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micropurchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micropurchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 3. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 4. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 5. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.? When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During testing, it was noted that the Authority did not have adequate internal controls over procurement and suspension and debarment requirements. Questioned Costs: $135,749 Context: During testing of a sample of 7 contracts, it was noted that 7 contracts did not comply with compliance requirements. The sample was a statistically valid sample. ? For 2 contracts tested, the Authority was unable to provide a copy of the contract, or documentation to support the contract was properly procured. ? For 3 contracts tested, the Authority was unable to provide documentation to support that a cost analysis was performed prior to entering the contract. ? For all 7 contracts tested, the Authority was unable to provide documentation that it ensured the vendor was not suspended or debarred before entering into the contract. Cause: The Authority failed to maintain proper documentation of contracts and procurement procedures to evidence compliance. Effect: The Authority is not in compliance with federal regulations regarding procurement of contracts, which could lead to vendors receiving funds that are not properly vetted. Recommendation: We recommend that the Authority reviews it?s procurement policy and active contracts and future contracts to ensure that all policies and procedures regarding procurement of contracts are properly followed and documented. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Inter-fund receivables are recorded on FDS line 144 (Inter program ? due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects ? Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)). Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund. Questioned Costs: Unknown Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,787,011. This is a result of the Authority using a revolving fund for expenses. Cause: The Authority failed to properly monitor and reconcile it?s revolving fund between programs. Effect: The Authority is not in compliance with requirements regarding use of operating funds. Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program CFDA Number: 14.871 Award Period: 10/1/20-9/30/21 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per (24 CFR sections 982.158(d) and 982.404), For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations. Condition: During our testing we noted the Authority did not have adequate internal controls designed to ensure compliance with tenant eligibility and reporting requirements. Questioned Costs: Unable to determine Context: During our testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 instance where a unit failed inspection and there is no documentation that the unit ever passed Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with the inspection requirements. Effect: The Authority is not in compliance with federal regulations regarding inspections. The Authority could have paid HAP expenses for units that do not pass guidelines. Recommendation: We recommend that management review their controls for conducting follow up inspection on initially failed home inspections and ensure compliance standards are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Program CFDA Number: 14.871 Award Period: 10/1/19-9/30/20 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 24 CFR section 960.259 states that for both family income examinations and reexaminations, the PHA must 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. 24 CFR sections 5.212, 5.230, and 5.601 through 5.615 states that the head of household must sign (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Members of the household 18 or older are also required to sign these forms. The PHA is required to submit form HUD-50058, Family Report (OMB No. 2577-0083) electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 908.104 states that a PHA must electronically transmit to HUD all required data fields (correctly formatted) from the HUD-50058 form in accordance with HUD instructions. Condition: During our testing we noted the Authority did not have adequate internal controls designed to ensure compliance with tenant eligibility and reporting requirements. Questioned costs: Unable to determine Context: During our testing of a sample of 40 tenant files for eligibility and reporting purposes, it was noted that 4 files did not comply with eligibility and reporting requirements. The sample was a statistically valid sample. ? 1 instance where the file did not have the HUD form 9886 release for information signed by all members of the household ? 3 instances where the HUD 50058 was not uploaded to PIC for the effective date tested Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with the eligibility and reporting requirements. Effect: The Authority is not in compliance with federal regulations regarding eligibility and reporting. The amount of tenant rent could be incorrect based on missing or inaccurate information. Recommendation: We recommend that management review their controls for retrieving and submitting tenant information and establish a method that ensures compliance. Views of responsible officials: There is no disagreement with the audit finding.