HOUSING AUTHORITY OF THE CITY OF KILLEEN

Program Name Housing Choice Vouchers CFDA Number 14.871 2021-001 Housing Quality Standards Inspection/HQS Enforcement Internal Control Significant Deficiency N Special Test and Provisions Criteria The PHA must inspect the unit leased to a family at least bi-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 ??982.405, 983.103)). Additionally, 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 (24 CFR sections 982.158(d) and 982.404). Condition During our audit, the Authority was unable to provide us with documentation on a follow up for the failed inspections. Context We selected a sample of 5 failed inspections that occurred during the fiscal year. Out of the 5 samples selected, 4 of those lacked the proper documentation of a follow up for the failed inspection. Cause Controls over compliance associated with the Authority?s grants of federal funds are inadequate. Effect The Authority is non-compliant with the federal regulations over this federal program, this could potentially result in significant operating and financial penalties. Recommendations We suggest the Authority structure a system capable of properly overseeing compliance with regulations relative to these grants as well as maintaining more accurate and complete documentation of adherence to compliance. Management Views Agrees.

2021-002 Recertification Documentation Internal Control Significant Deficiency E Eligibility Criteria The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register (24 CFR section 982.158 and 24 CFR Part 982, Subpart K). Condition Incomplete documentation of tenant?s recertification form for participation in the Housing Choice Voucher Program. During the sampling of tenant files, a majority of the file lacked the correct recertification form to ensure the HAP agreed to the 50058. Context We selected a sample of 20 tenant files, of those files 14 lacked the correct recertification form that matched the HAP payment. Cause The Authority did not have adequate controls to ensure that recertification forms were obtained during re-examination of tenant for the Housing Choice Voucher Program. Effect Compliance with eligibility could not be demonstrated for sampled tenants. Therefore, individuals receiving HAP assistance and/or HAP could be receiving the wrong amount. Recommendations Management should implement internal control procedures to ensure that recertification forms are obtained during re-examination and are properly files in the tenant's file. Management Views Agrees.

Criteria The Uniform Financial Reporting Standards (UFRS), at 24 CFR 5.801, require Authorities that administer HCV Program, to submit financial information to HUD electronically. The Authority must submit certain leasing and cost data through the VMS. Condition The Authority encountered reporting issues in recording its payments in the VMS which was not reconciled with the financial accounting system and resulted in material difference between the accounting system and the VMS reporting. Context The Authority reported total HAP of $782,512 in the Financial Data Schedules (FDS) and the VMS reported HAP of $780,844. The $1,668 variance has not been reconciled. Further the port-in HAP in the FDS was reported at $1,738,966 and the VMS reported payments of $1,652,140. The variance of $86,826 has not been reconciledCause Change in staff of a key employee which increased the workload of the remaining staff. This prevented a detailed reconciliation of voucher payments. Effect Material difference between VMS and the Authority?s financial records. Recommendations Management should develop monitoring procedures to ensure that reconciling items are identified and entered into the VMS on a monthly basis. Management Views We agree with this finding and have outlined our plan of action in our corrective action plan.

Criteria 2 CFR part 200, Appendix VII, paragraph C.1.b. - Allocation of indirect costs and determination of indirect costs rates - Where a governmental unit's department or agency has several major functions which benefit from its indirect costs in varying degrees, the allocation of indirect costs may require the accumulation of such costs into separate cost groupings which then are allocated individually to benefitted functions by means of a base which best measures the relative degree of benefit. The indirect costs allocated to each function are then distributed to individual Federal awards and other activities included in that function by means of an indirect cost rate(s). Condition During the audit we noted certain joint costs were treated as direct costs and charged 100% to one program when they benefited several programs. These costs included expenditures such as software and consulting costs. Context The Authority incurred software costs and consulting contracts in excess of $50,000 that was not allocated to each program that benefited from those costs but allocated solely to the HCV Program. Cause Lack of training/knowledge on OMB allocation requirements as well as a lack of internal controls to identify and allocate joint costs. Effect An audit adjustment was required to allocate joint costs between programs of the Housing Authority. Recommendations Management should implement a system of policies and procedures to identify and allocate indirect costs that benefit several programs in a manner that best represents each programs relative degree of benefit in line with OMB requirements.

Criteria: As a condition of admission or continued occupancy, require the tenant and other family members to providenecessary information, documentation, and releases for the Authority to verify income eligibility (24 CFR sections5.230, 5.609, and 982.516).Condition: Incomplete documentation of tenant?s income eligibility for participation in the Housing Choice VoucherProgram. During the sampling of 25 tenant files, 25 did not contain EIV reports to document and verify incomeeligibility.Cause: The Authority did not have adequate controls to ensure that EIV reports were obtained during admission andre-examination of tenant for the Housing Choice Voucher Program.Effect: Compliance with income limits and eligibility could not be demonstrated for sampled tenants. Therefore,ineligible individuals may be receiving HAP assistance and /or HAP is being incorrectly calculated based on unverifiedincomes.Questioned Costs: UndeterminableContext: The Authority manages 75 Housing Choice Vouchers and 185 Port-In Voucher during the year. We sampled25 tenant files for multiple compliance requirements.Recommendation: Management should implement internal control procedures to ensure that timely EIV reports areobtained during admission and re-examination.Management?s View: We agree with this finding and have outlined our plan of action in our corrective action plan.

required to authorize the release of information by signing the appropriate HUD forms (i.e. 9886).Condition: 25 sampled tenant files did not contain properly executed authorization to release information forms.Cause: The Authority did not maintain internal control procedures to ensure that authorization forms were completedand signed in tenant files.Effect: Noncompliance with HUD regulations concerning authorization to release financial information.Questioned Costs: NoneContext: The Authority manages 75 Housing Choice Vouchers and 185 Port-In Voucher during the year. We sampled25 tenant files for multiple compliance requirements.Recommendation: Management should develop internal control review procedures to ensure that properly executedForms 9886 are obtained and retained in the tenant files.Management?s View: We agree with this finding and have outlined our plan of action in our corrective action plan.

Program, to submit financial information to HUD electronically. The Authority must submit certain leasing and costdata through the VMS.Condition: The Authority encountered reporting issues in recording its payments in the VMS which was not reconciledwith the financial accounting system and resulted in material difference between the accounting system and the VMSreporting.Cause: Change in staff of a key employee which increased the workload of the remaining staff. This prevented adetailed reconciliation of voucher payments.Effect: Material difference between VMS and the Authority?s financial records.Questioned Costs: NoneContext: The Authority reported total HAP of $695,347 in the Financial Data Schedules (FDS) and the VMS reportedHAP of $672,558. The $22,789 variance has not been reconciled. Further the port-in HAP in the FDS was reported at$1,977,637 and the VMS reported payments of $1,816,829. The variance of $160,808 has not been reconciled.Recommendation: Management should develop monitoring procedures to ensure that reconciling items are identifiedand entered into the VMS on a monthly basis

Criteria: The Authority is required calculated utility allowances in accordance with its utility allowance standards andreflected in HUD form 52667. The Authority must use the lower of the approved voucher bedroom size or actualbedroom size when calculating the Utility Allowance to use in the calculation.Condition: 25 tenant files of our sample 25 contained utility allowances that were not the lower of the approvedvoucher bedroom size or actual bedroom size when calculating the Utility Allowance to use in the calculation.Cause: Procedures to ensure that the appropriate utility allowance was note adhered to on a consistent basis.Effect: Tenant payments due to landlords were incorrectly calculated, HAP payments incorrectly calculatedQuestioned Costs: UndeterminableContext: The Authority manages 75 Housing Choice Vouchers and 185 Port-In Voucher during the year. We sampled25 tenant files for multiple compliance requirements.Recommendation: Management should review tenant files to ensure that the appropriate utility allowance is used forthe type of unit under contract.Management?s View: We agree with this finding and have outlined our plan of action in our corrective action plan

Criteria: The Uniform Financial Reporting Standards (UFRS), at 24 CFR 5.801, require Authorities that operatingexpenses be supported by verifiable audit evidence.Condition: The operating expenses for the year did not have vendor invoices to support the necessary and reasonableor classification of expense criteria during the year.Cause: The staff turnover during the resulted in significant delays in reporting and recording information in theaccounting system.Effect: Operating expenses could not be tested and verified materially by the auditor during the year.Questioned Costs: UndeterminableRecommendation: Management should implement procedure to ensure timely and accurate reporting of financialactivity.Management?s View: We agree with this finding and have outlined our plan of action in our corrective action plan.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION