HOUSING AUTHORITY OF CITY OF WALLA WALLA

Corrective Action Plan For the year ended December 31, 2021 U.S. Department of Housing and Urban Development: The Housing Authority of the City of Walla Walla respectfully submits the following corrective action plan for the year ended December 31, 2021. Auditor: Novogradac and Company, LLP Certified Public Accountants 1144 Hooper Avenue Suite 203 Toms River, New Jersey 08753 The findings from the December 31, 2021 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Findings ? Federal Award Program Audit Finding 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? N. Special Tests and Provisions ? Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the 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)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. On May 4, 2021, HUD issued Notice PIH 2021-14(HA). In this notice, HUD recognized the unprecedented challenge the COVID-19 pandemic poses to PHAs in carrying out the most essential of their HCV program administrative responsibilities. The notice allowed for the Authority to rely on the owner's certification that the owner has no reasonable basis to have knowledge that life-threatening conditions exist in the unit or units in questions. At minimum, the PHA must require the owner?s certification. However, the PHA may add other requirements or conditions in addition to the owner?s certification, but is not required to do so. The PHA is required to conduct an HQS inspection on the unit as soon as reasonably possible but no later than June 30, 2022. Condition: Based upon inspection of the Authority?s files and on discussion with management there were no owner's certifications performed during the audit period. The Authority only performed initial and special inspections during the audit period. Context: Of a sample size of twenty-three (23) tenant files, the following information was unavailable for examination at the time of audit: ? Owner's certification documentation was missing in eight (8) files Our sample size is statistically valid. Known Questioned Costs: $48,496 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance with Notice PIH 2021-14(HA). Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance, the compliance supplement, and all PIH notices. Views of responsible officials and planned corrective action: Management unintentionally did not request owner's certifications during the audit period as required by Notice PIH 2021-14(HA). The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Program and will implement internal control procedures that will ensure compliance of federal regulations, including PIH notices. The Authority has since complied with Notice PIH 2021-14(HA), and has met the June 30, 2022 deadline to have all annual inspections completed. Sarah Schroeder, Housing Director, will be responsible to implement this corrective action by December 31, 2022.

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