Eastern Regional Housing Authority

2023-001 - Internal Control over Federal Award – Reporting (VMS) – Significant Deficiency in internal controls over compliance over reporting. ALN and Title: 14.871 Section 8 Housing Choice Vouchers Federal Agency: US Department of Housing and Urban Development Award Year: 2023 Criteria - Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity 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). In addition, program reporting requires HUD-52681-B, Voucher for Payment of Annual Contributions and Operating Statement (OMB No. 2577-0169). The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. Condition - The HUD 52681-B VMS report is not reviewed prior to submission. Cause - Because the Authority has few employees they communicate daily and therefore did not recognize the need for review. Effect - Potential non-compliance with program requirements and that non-compliance may go undetected for an extended period of time. Questioned Costs - None Perspective - The documentation of review was not retained for any of the twelve monthly reports. Recommendation - The Authority should establish a clearly documented review process wherein someone other than the preparer reviews the VMS report prior to submission. Management Response: The Authority will have a member of management review VMS submission prior to submission. Estimated Completion Date: February, 2024 Responsible Party: Executive Director, Deputy Director and Assistant Deputy Director.

2023-009 Application Access Control – Significant Deficiency in internal control over compliance over reporting ALN and Title: 14.871 Section 8 Housing Choice Vouchers Federal Agency: US Department of Housing and Urban Development Award Year: 2023 Criteria – NMAC 1.12.20.14 (A) Application Access Control, “Access to agency business and systems applications shall be restricted to those individuals who have an identified business need to access those applications or systems in the performance of their job responsibilities.” ”In addition, Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity 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). Condition – All the users for the Housing Authority within the “Housing Pro” software have administrative level access. Cause – The Housing Authority gave all of their section 8 and public housing employees’ full access within the “Housing Pro” software, without considering the need to modify user permission based on their job responsibilities. Effect – The users can access modules within the “Housing Pro” software for which their job duties do not allow for. Questioned Costs - None Perspective –All employees have administrative access to the Housing Pro software. Recommendation – We recommend that the Housing Authority should review each employees’ access permissions within the “Housing Pro” software and modify their access according to their job responsibilities. Management Response: All employee access was reviewed and corrected so that only the two Deputy Directors have administrative access. Estimated Completion Date: November 30, 2023 Responsible Party: Deputy Director

2022-002 Noncompliance with Special Tests and Provisions ? Rolling forward equity balances (Other Non-Compliance) Federal Program Information: Questioned Costs: Finding Agency: Department of Housing and Urban Development None Program Title: Section 8 Housing Choice Vouchers Assistance Listing Number: 14.871 Compliance Requirement: Special Tests and Provisions Condition ? The equity balances for Section 8 Housing Choice Vouchers were not properly maintained between Administrative Fee Equity and HAP Equity. Criteria ? The ACC requires PHA to properly account for program activity ? records and accounting transactions support a proper roll-forward of equity. Cause ? Confusion caused by the absorbtion of Tucumcari HA Section 8 program that included balances later determined to be administrative fee equity per discussion with HUD. PHA was accustomed to expending all administrative fees and therefore incorrectly assumed the same for the year of absorbtion of Tucumcari Section 8 Housing. Effect ? Potential that PHA is not funded correctly. Recommendation ? The PHA should correct the account balances. Management Response ? The staff shall correct the account balances, specifically in the HUD FDS and VMS records. Estimated Completion Date: March 31, 2023 Responsible Party: Deputy Director

2020-002 (2019-002) Noncompliance with Special Tests and Provisions ? Various tenant file documentation missing and reinspection not performed timely (Other Non-Compliance) Repeated with modification. Federal Program Information: Questioned Costs: Finding Agency: Department of Housing and Urban Development None Program Title: Section 8 Housing Choice Vouchers CFDA Number: 14.871 Compliance Requirement: Special Tests and Provisions Condition ? During our testing of 50 Section 8 tenant files we noted the following: ? 2 Bi-annual HQS (Housing Quality Standards) inspections not performed timely. ? 6 instances of waiting list verification missing ? 1 tenancy request report missing ? 15 Landlord lead paint disclosure documents missing ? 1 Privacy Notice not signed by tenant ? 1 reasonable rent survey missing (The status of this finding remains essentially the same as prior year.) Criteria ? The Section 8 program compliance requirements per 24CFR Section 982 require performance and documentation of reinspection, waiting list maintenance, tenant requests, landlord responsibilities, privacy notice and reasonable rent determination. Cause ? File review checklist lacked complete detail of required documentation. Effect ? Potential for non-qualifying properties available to tenants. Potential for improper selection from waiting list. Recommendation ? Training/information provided to occupancy specialists and clarification/update file review checklist details. Management Response ? Eastern Regional Housing Authority will review Policy, Procedures and HUD required documentation with all of the Section 8 staff. Estimated Completion Date: October 31, 2020 Responsible Party: Section 8 Program Supervisor

FA 2019-001 Noncompliance with Special Tests and Provisions HQS Enforcement (Significant Deficiency) Federal program information: Funding Agency: Department of Housing and Urban Development Program Title: 8 Housing Choice Voucher Program CFDA Number: 14.871 Compliance Requirement: Special Tests of Provisions Condition: During our audit, we noted the following: ! There were two out of thirty tenant files tested that did not have a correction of a non-life threatening HQS deficiency within the 30-day period as required. Criteria: Per According to 24 CFR sections 982.158(d) and 982.404), the Housing Authority must ?verify that the files document that the PHA required correction of any cited life threatening HQS deficiencies within 24 hours of the inspection and of all other HQS deficiencies within 30 calendar days of the inspection or within a PHA approved extension?. Cause: The Housing Authority did not follow up on some HQS deficiencies in a timely matter on tenants HQS inspections. Questioned Costs: None Effect: The Housing Authority was not in compliance with the HQS enforcement requirements for the current year. Recommendation: We recommend that the Housing Authority implement a process to ensure that all HQS deficiencies are followed up on within the 30-day period and all appropriate failed inspections are remediated.

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