NORTHWEST GEORGIA HOUSING AUTHORITY

2023-001 – ALN 14.850 – Public & Indian Housing – Allowable Costs Condition and Criteria: Loss of Internal Controls over Credit Card In a sample of Five (5) months of Credit Card statements and reconciliations, the following deficiencies were noted: 1 Month (January 2023) had an amount of $1,416.44 of transactions that were not supported 2 Month (February 2023) had an amount of $4,174.24 of transactions that were not supported. 3 Month (March 2023) had an amount of $1,501.68 of transactions that were not supported . 4 Month (August 2023) had an amount of $534.45 of transactions that were not supported . 5 Month (November 2023) had an amount of $476.38 of transactions that were not supported . 1 CFR § 200.303 states that (a) The PHA must establish and maintain effective internal controls 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. In accordance with the cost principles under 2 CFR part 200, subpart E, costs must be necessary and reasonable for the performance of the Federal award, conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E, and be adequately documented. Amount of Questioned Costs. None. Context: Of forty check disbursements tested, five of these disbursements were credit card payments. The Authority was unable to locate supporting backup documentation for some of the charges on all five of these credit card disbursements tested. Cause: The Authority's deficiencies in its credit card reconciliations stem from a lack of certain controls concerning HUD requirements and procedures. Effect: The Authority has not been in complete compliance with HUD requirements. The Authority could incur costs that are unallowable and that are not necessary or reasonable. These internal control deficiencies could result in a possibility that errors or irregularities relating to costs can exist and not be detected by the Authority’s internal controls. Auditor’s Recommendation: We recommend that the Authority’s management take the necessary steps to ensure that all disbursements are sufficiently documented and supported by adequate backup. We also recommend that the Authority implement controls to detect when check disbursements do not have adequate support in accordance with 2 CFR part 200, subpart E. Grantee Response: Current management acknowledges the finding and is following the auditor’s recommendations.

2023-002 – ALN 14.850 – Public & Indian Housing – Eligibility Condition and Criteria: During our audit, it was determined that internal control deficiencies over compliance existed over the Authority’s Public & Indian Housing program eligibility determination process. The Authority's staff had inadequate internal controls over the Authority’s Public & Indian Housing tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Seven of twenty-five tenant files tested for eligibility compliance, all of these files did not have current EIV (Enterprise Income Verification) documentation. Three of the twenty-five tenant files tested lacked supporting documentation for income and eligibility determination. In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. Amount of Questioned Costs. None. Context: Seven of twenty-five tenant files tested for eligibility compliance, all of these files did not have current EIV (Enterprise Income Verification) documentation. Three of the twenty-five tenant files tested lacked supporting documentation for income and eligibility determination. Cause: The Authority did not have proper quality control procedures in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications were not operating effectively. The Authority lacked a clear understanding of HUD Low Rent eligibility requirements relating to the EIV system and HUD documentation requirements. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. Auditor’s Recommendation: In general, we recommend that the Authority review documentation requirements regarding tenant files. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. We also recommend that Authority staff to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or changed to the public housing industry. Grantee Response: Current management acknowledges the finding and is following the auditor’s recommendations.

2023-003 – ALN 14.850 – Public & Indian Housing – 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 Housing Authority (PHA) 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 cost for the inter-program balances between the Public and Indian Housing program, Housing Choice Voucher program, Blended Component Units, and Business Activities’ programs due to poor cash management controls. Amount of Questioned Costs. $4,187,263, resulting in unallowable costs created over years. Context: The Authority’s management failed to ensure inter-program advances were reimbursed properly and timely. Costs assigned to the Public and Indian Housing programs, Housing Choice Voucher program, other HUD programs or Business Activities’ programs could be unallowable and/or unreasonable. Cause: Public and Indian Housing programs cash balances are unable to resolve outstanding inter-program balances due to less unrestricted cash than existing inter-program balances. This causes cash not to be settled during the year hindering oversight of cash balances at a program level. Effect: The Public and Indian Housing program does not have sufficient cash to satisfy inter-program balances due. The restriction of cash to cover inter-fund 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 the Authority settle interfund 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 need to implement stricter processes around inter-program balances to ensure the Authority can properly assess cash balances at a program level. Grantee Response: Current management acknowledges the finding and is following the auditor’s recommendations.

2023-005 – ALN 14.871 – Housing Choice Voucher Program – Eligibility Condition and Criteria: During our audit, it was determined that internal control deficiencies over compliance existed over the Authority’s Housing Choice Voucher program eligibility determination process. The Authority's staff had inadequate internal controls over the Authority’s Housing Choice Voucher tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Six of twenty tenant files tested for eligibility compliance, one of the twenty files was using the wrong board approved utility allowance, one of the twenty files income was calculated incorrectly based on third party documentation, and one of the twenty files failed to re-evaluate income on an annual basis. Three of the twenty tenant files tested lacked supporting documentation for income and eligibility determination. In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. Amount of Questioned Costs. None. Context: Six of twenty tenant files tested for eligibility compliance, one of the twenty files was using the wrong board approved utility allowance, one of the twenty files income was calculated incorrectly based on third party documentation, and one of the twenty files failed to re-evaluate income on an annual basis. Three of the twenty tenant files tested lacked supporting documentation for income and eligibility determination. Cause: The Authority did not have proper quality control procedures in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications were not operating effectively. The Authority lacked a clear understanding of HUD Housing Choice Voucher eligibility requirements relating to HUD documentation requirements. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. Auditor’s Recommendation: In general, we recommend that the Authority review documentation requirements regarding tenant files. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. We also recommend that Authority staff to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or changed to the public housing industry. Grantee Response: Current management acknowledges the finding and is following the auditor’s recommendations.

2022-1 Condition: Loss of Internal Controls over Credit Card In a sample of Three (3) months of Credit Card statements and reconciliations, the following deficiencies were noted: 1 Month (February 2022) had 30 unsupported transactions across 11 different credit cards for a total of $2,189.68. 2 Month (July 2022) had 11 unsupported transactions across 4 different credit cards for a total of $1,306.84. 3 Month (September 2022) had 36 unsupported transactions across 7 different credit cards for a total of $6,724.97. 1 CFR ? 200.303 states that (a) The PHA must establish and maintain effective internal controls 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. CFDA Number: 14.850 Questioned Costs: None Criteria: 2 CFR ? 200.303 Cause/Effect: The Authority?s deficiencies in its credit card reconciliations stem from a lack of certain controls concerning HUD requirements and procedures. The Authority has not been in complete compliance with HUD requirements. Recommendation: We recommend that the Authority review its internal control procedures over credit cards. We also recommend more standardization in monthly credit card reconciliations. Reply: We concur with this finding and the Auditor?s recommendation. We will review the internal control procedures over credit cards and will implement more standardization in monthly credit card reconciliations. Management will implement procedures to clear this finding in FY 2023.

2022-2 Condition: Deficiencies Noted in Examination of Section Eight (8) Tenant Files In a sample of Forty (40) Section 8 Participant files the following deficiencies were noted: 13 files were found that the Participates moved into PBV properties were not done timely by HCVP 1 File lacked a passed HQS inspection within 30 days of a failed HQS inspection. 1 File lacked homeownership documentation while being in the homeownership program. 1 File lacked a lease. 2 Files lacked waitlist support information. 4 Files had errors in rent calculations. 1 File lacked support for change of family composition. 4 Files had late annual recertifications. 4 Files had FSS errors in income calculations and unsupported FSS escrow calculations. 1 SEMAP not submitted to HUD FY 2022 24 CFR ? 982.405 states that (a) The PHA must inspect units leased under the HCVP at the time of initial leasing and at least annually thereafter to ensure the units meet HQS. (b) The PHA must also conduct supervisory quality control HQS inspections (24 CFR sections 982.305 and 982.405). 24 CFR ? 985.101 (a) States that a PHA must submit the HUD-required SEMAP certification form within 60 calendar days after the end of its fiscal year. CFDA Number: 14.871 Questioned Costs: None Criteria: 24 CFR ? 982.405 requirements for PHA initial and periodic unit inspection. Cause/Effect: The Authority?s deficiencies in its resident files stems from a lack of certain controls concerning HUD requirements and procedures. The Authority has not been in complete compliance with HUD requirements. Recommendation: We recommend that the Authority review its internal control procedures over tenant file re-certifications and documentation in relation to annual HQS inspections. We also recommend more standardization in file organization of information. We recommend that the Authority review its procedures over FSS escrow calculations. We recommend that the Authority review its procedures over timely submission of SEMAP. Reply: We concur with this finding and the Auditor?s recommendation. We will review the internal control procedures over tenant file re-certifications and documentation in relation to annual HQS inspections. We will implement more standardization in file organization of information and will review procedures concerning FSS escrow calculations. Management will implement procedures to clear this finding in FY 2023.

2021-1 Condition: Deficiencies Noted in Examination of Section 8 Tenant Files In a sample of Forty-Five (45) Section 8 Participant files the following deficiencies were noted: 27 files lacked Inspections for FY 2021 1 file lacked FY 2021 leases 1 file lacked FY 2021 recerts 1 file lacked reasons why tenant was terminated from program 1 file lacked correct income calculations 1 file was absorbed in 2/2020 by another PHA, yet NWGHA continued to pay HAP payments until 8/2020 CFDA Number: 14.871 Questioned Costs: None Criteria: 24 CFR requirements for Public Housing eligibility Cause/Effect: The Authority?s deficiencies in its resident files stems from a lack of certain controls concerning HUD requirements and procedures. The Authority has not been in complete compliance with HUD requirements. Recommendation: We recommend that the Authority review its internal control procedures over tenant file re-certifications and documentation. We also recommend more standardization in file organization of information. Reply: We concur with this finding and the Auditor?s recommendation. We will review the internal control procedures over tenant file re-certifications and documents. Management will implement procedures to clear this finding in FY 2022.

2019-1 Condition: Deficiencies Noted in Examination of Low-Rent Public Housing (LIPH) Tenant Files In a sample of 40 LIPH Tenant files, the following deficiencies were noted: LIPH: 3 files lacked 3rd party income verified and calculated accurately 2 files lacked timely annual recertification CFDA Number: 14.850 Questioned Costs: None Criteria: 24 CFR requirements for Low Income Public Housing Cause/Effect: These errors appear to be due to human error brought on by staff turnover. Recommendation: We recommend that the Authority review its internal control procedures over tenant file re-certifications and documentation. Reply: We concur with this finding and the Auditor?s recommendation. We will establish a control system to ensure that each tenant file is checked for accuracy. The Executive Director will also establish procedures to have a second employee check the files for compliances and to make sure all re-certifications are done in a timely manner.

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