Housing Authority of the City of HugoLocal Government

2020-005 U.S. Department of Housing and Urban Development Public and Indian Housing CFDA 14.850 Procurement, Suspension, and Debarment Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-Federal entity must use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procedures conform to applicable federal law and standards. Uniform Guidance requires price or rate quotations from an adequate number of qualified sources for small purchases and documentation of selection and approval of bids. Condition: During our testing of eligibility under the Public and Indian Housing program, we noted the Authority has not updated its procurement procedures to conform to applicable federal law and standards. Quotations from an adequate number of sources were not obtained for small purchases under Uniform Guidance as required. Cause: The Authority did not have adequate internal controls to monitor changes in federal legislation that required an update to its procurement procedures. As evidenced by this difference in policy, the Authority did not have adequate internal controls to ensure federal procurement policies were adhered to. Effect: Procurements did not follow federal standards and the best price for the purchases may not have been obtained. Questioned Costs: None reported Context/Sampling: The Housing Authority?s procurement procedures were examined in their entirety. 3 procurement transactions out of 3 were selected for testing. The federal procurement policies were not followed for any of the transactions. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Authority monitor changes in federal legislation and implement controls, when necessary, to ensure its procurement procedures are updated to conform with federal requirements. Views of Responsible Officials: Management agrees with the finding.

2020-006 U.S. Department of Housing and Urban Development Public and Indian Housing CFDA 14.850 Eligibility Material Weakness in Internal Control over Compliance Criteria: Program participant eligibility applications should be reviewed and approved by management. A separation of duties should be in effect for processes of compliance in accordance with 2 CFR Part 230. Condition: During our testing of eligibility under the Public and Indian Housing program, we encountered a lack of quality control review of tenant files. Cause: Tenant files not reviewed before applying rent calculation. Effect: Possible tenants rent fees incorrectly calculated or data missing. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 40 tenant files were selected for testing. The control was not in place for all tenant files tested. Repeat Finding from Prior Year(s): No Recommendation: We recommend that the Authority utilize another program specialist to review the eligibility approval process performed by the Public and Indian Housing program specialist. Views of Responsible Officials: Management agrees with the finding.

2020-007 U.S. Department of Housing and Urban Development Public and Indian Housing CFDA 14.850 Activities Allowed or Unallowed, Special Tests and Provisions Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: The OMB Compliance Supplement provides that a non-Federal entity must claim Federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Various costs were not allocated in accordance with the Authority?s cost allocation plan. In addition, various allocation statistics were improperly recorded, which impacted the percentages upon which costs were allocated. As of December 31, 2020, the Housing Choice Voucher (HCV) Program owes the Public Housing Program $142,546 for HCV expenses improperly paid by the Public Housing Program during 2020 and prior years. Cause: The Housing Authority did not have adequate internal controls to ensure costs were allocated in accordance with the approved cost allocation plan. Effect: Costs claimed were in excess of the amounts in the approved cost allocation plan. Questioned Costs: 2020 amount - $15,151; Cumulative amount - $142,546. Context/Sampling: A nonstatistical sample of 60 expenditures were selected for testing. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Housing Authority enhance internal controls to ensure costs are allocated in accordance with the approved cost allocation plan and continue to repay the funds from Section 8 to Low Rent Public Housing in accordance with the HUD agreement. Views of Responsible Officials: Management agrees with the finding.

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