CENTRAL OREGON REGIONAL HOUSING AUTHORITYLocal Government

Assistance Listing Number/Federal Program/Granting Agency: ALN 14.871/14.879 Section 8 Housing Choice Voucher/Mainstream Vouchers Programs (Housing Voucher Cluster) Criteria: Section 8 Housing Choice Voucher Program requires the Authority to obtain and document in the file third-party verification of assets, income, expenses and other factors that affect the determination of adjusted income as a condition of admission or continued occupancy. Statement of Condition: During our test of compliance over the HCV program, which has a population of over 250 tenant files, we noted 1 exception out of 25 tenant files tested. A third-party of verification documented annual child support income $7,696 annually. However, only $3,207 was included in the income calculation on Form 50058. Questioned Costs: below $25,000. Cause: The omission was due to oversight by the Housing Authority as well as a lack of training and understanding related to properly calculating and reporting income. Effect or Possible Effect: The error resulted in tenant portion of rent and Housing Assistance Payments to be miscalculated. Perspective: One instance of noncompliance was identified within a sample of 25 HAP vouchers totaling $29,006 from a universe of over 250 applicable vouchers, which is a statically valid sample. This indicates a potentially systemic issue within the income verification process, not just an isolated error. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Housing Authority provide targeted refresher training to staff and reviewers specifically on identifying and properly recording non-wage income sources (such as child support) to ensure these amounts are consistently included in the income calculation. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to submit annual financial reports, including RD Forms 3560-7 and 3560- 10 with 12 months of balance sheet and actual income and expenses, to RD no later than 90 days following the close of the project fiscal year. Statement of Condition: During our test of compliance over the RD program, management did not provide RD Forms 3560-7 and 3560-10 with 12 months of balance sheet and income and expenses for Canyon East and Menta Park at the time of our review. The reports were eventually submitted to RD on 12/18/25, which was more than 90 days after fiscal year-end and therefore not within the required time frame. Questioned Costs: None. Cause: The reporting delays were due to the transition of management companies during the year, which disrupted normal reporting processes. Effect or Possible Effect: The Housing Authority did not comply with the reporting requirement set forth in the RD HB-2-3560 Chapter 4, Section 5 Annual Financial Reporting Due Dates and Agency Review of Annual Financial Reports, which could affect reserve funding availability for project maintenance or repairs. Perspective: The noncompliance identified relates to the annual financial reporting for 2 RD-funded projects, and the population tested consisted of 100% of projects subject to the annual reporting requirement. As the required reports for both projects were submitted after the required deadline, the noncompliance affected the entire population for the period under audit. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Repeat finding. Recommendation: The Housing Authority should implement a formal tracking process to monitor the submission of all required RD reports and ensure that copies of RD Forms 3560-7 and 3560-10, along with supporting financial statements, are retained for each project. This process should include clear responsibilities and deadlines, particularly during management transitions, to ensure timely compliance with RD reporting requirements. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make deposits into the Replacement Reserve account in accordance with the requirements set forth in the projects’ RD loan agreements Statement of Condition: During our test of compliance over the RD program, we noted that deposits for Canyon East and Menta Park were missing for the period March 2025 through June 2025, totaling $16,617. Questioned Costs: None. Cause: The deposit delays were due to the transition of management companies during the year, which disrupted normal deposit processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely Replacement Reserve deposits, which could affect reserve funding availability for project maintenance or repairs. Perspective: The required Replacement Reserve deposits totaled $49,852 for the fiscal year, representing 12 months of required deposits in accordance with the RD loan agreements. Deposits were underfunded by $16,617, as no deposits were made from March 2025 through June 2025. As both RDfunded projects were affected during this four-month period, the noncompliance impacted 100% of the population for that portion of the year. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Not a Repeat finding. Recommendation: We recommend the Housing Authority implement a formal monitoring process to track Replacement Reserve deposits and ensure that all required deposits are made timely, even during management transitions. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make all payments due under the RD note and mortgage in accordance with the loan agreements. Statement of Condition: During our test of compliance over the RD program, we noted missing mortgage payments totaling $10,895 for Menta Park (April – June 2025) and $4,198 for Canyon East (March – April and June 2025). Questioned Costs: None. Cause: The payment delays were due to the transition of management companies during the year, which disrupted normal payment processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely mortgage payments, which could result in noncompliance with RD loan terms and potential interest or penalty accrual. Perspective: The required mortgage payments totaled $60,375 for the fiscal year, representing 12 months of required payments in accordance with the RD loan agreements. Payments were short by $15,093 due to 3 months missing payments for Menta Park and Canyon East. As both RD-funded projects were affected during this 3-month period, the noncompliance impacted 100% of the population for that portion of the year. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Not a Repeat finding. Recommendation: We recommend the Housing Authority implement a formal monitoring process to track all RD mortgage payments and ensure that payments are made timely and properly documented, particularly during management transitions. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency:AL # 21.027. Coronavirus State and Local Fiscal Recovery Funds, American Rescue Plan Act (ARPA) Criteria: Recipients are required to follow procurement procedures as required in the Uniform Guidance, 2 CFR 200.320. Statement of Condition: The Housing Authority did not follow sealed bid method in accordance with the procurement standards 2 CFR 200.320 of the Uniform Guidance. Questioned Costs: None. Cause: The Housing Authority executed a contract with the General Contractor and did not follow sealed bid method for procurement in accordance with the Uniform Guidance. Effect or Possible Effect and Perspective: The Housing Authority did not comply with the procurement requirement set forth in the Uniform Guidance, 2 CFR 200.320. Repeat Finding: Repeat finding. Recommendation: The Housing Authority should designate a person in the development department to verify which procurement method should be used. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: AL# 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to submit the annual proposed budget for the following year 90 days before the start date of the fiscal year. Recipients are also required to submit annual financial reports including Form RD 3560-7 with 12 months of actual income and expenses to RD no later than 90 days following the close of the project fiscal year. Statement of Condition: During our tests of compliance over the RD program, we noted the 2023-2024 RD proposed budgets for Canyon East and Menta Park were not approved by RD since they were not submitted to RD by April 1, 2023 through MINC. The Management was also unable to provide Forms 3560-7 for Canyon East and Menta Park with 12 months of actual income and expenses; therefore, we were unable to verify if the reports were submitted to RD within the required time frame. During our tests of internal control over compliance, we noted the Management did not respond to RD's annual budget reminder in a timely manner. Questioned Costs: None. Cause: The Management stated they submitted the requested 2023-2024 annual budgets, but there were issues with the utility allowances not aligning in the RD software. The Management tried to resolve the issues with RD but eventually the process stopped with no resolution. Effect or Possible Effect and Perspective: The Housing Authority did not comply with the reporting requirement set forth in the RD HB-2-3560 Chapter 4, Section 4 Budget Requirements and Chapter 4, Section 5 Annual Financial Reporting Due Dates and Agency Review of Annual Financial Reports. Repeat Finding: Not a Repeat finding. Recommendation: The Housing Authority should monitor the required RD report submission status, and maintain the documentation of the annual financial reports. Views of Responsible Officials: Agree.

CFDA Number/Federal Program/Granting Agency: Housing Choice Vouchers - Cluster # 21.027 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Recipients are expected to have procurement policies and procedures in place that comply with procurement standards of the Uniform Guidance. Statement of Condition: The Housing Authority did not follow procurement policies for the Architect. Questioned Costs: None. Cause: The Housing Authority executed a contract with the Architect contractor without following procurement policies. Effect or Possible Effect and Perspective: The Housing Authority did not comply with its procurement policies in selection of an Architect. Repeat Finding: Not a repeat finding. Recommendation: The Housing Authority should designate a person in the development department to verify whether procurement is applicable to a specific vendor. Views of Responsible Officials: See Corrective Action Plan.

CFDA Number/Federal Program/Granting Agency: 10.405/Farm Labor Housing Loans. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Statement of Condition: The Housing Authority did not timely verify that contractors and subcontractors were not suspended or debarred. Questioned Costs: None. Cause: The Housing Authority relied on the general contractor to verify whether subcontractor were not suspended or debarred. Effect or Possible Effect and Perspective: We reviewed the list of contractor and subcontractor and concluded that none of them were suspended or debarred. Possible effect might be on future development where a contractor might perform work while they are either debarred or suspended resulting in noncompliance with the federal awards. Repeat Finding: Not a repeat finding. Recommendation: The Housing Authority should designate a person in the development department to verify whether contractors and subcontractors whether they are suspended and debarred before performing and preferably entering into a contract to perform work.

CFDA Number/Federal Program/Granting Agency: 14.871/14.879; Criteria: Section 8 Housing Choice Voucher/Mainstream Vouchers Programs (cluster) N/A; Statement of Condition: The Housing Authority's internal Administrative Plan for the Section 8 Housing Choice Voucher requires certifications for tenants with $0 income to be re-examined every 3 months. We noted out of the 1,117 tenants, 68 reported $0 income, re-examination on a 3 month basis was not performed for the $0 income tenants.; Questioned Costs: None, re-examination of income is only required on an annual basis, which theHousing Authority has performed.; Cause: The COVID-19 pandemic and evolving procedures and guidance from authoritative bodies has caused confusion.; Effect or Possible Effect and Perspective: The errors could result in tenant portion of rent and Housing Assistance Payments to be miscalculated.; Repeat Finding: Not a repeat finding.; Recommendation: The Compliance Director should include this requirement in the tenant file checklist to ensure completeness of the tenant files. In addition, the Compliance Director should establish a monthly checklist for Housing Specialists and incorporate the requirement to re-examine tenants with $0 income.; Views of Responsible Officials: Since this is not a HUD requirement, the Compliance Director will amend the Authority?s Administrative Plan to change the language on PHA-Initiated Interim Reexaminations (Chapter 11-II.C. Changes Affecting Income or Expenses) as follows: ?If the family has reported zero income, Housing Works may conduct an interim reexamination every 3 months as long as the family continues to report that they have no income.? Housing Works will no longer be required to conduct interim reexaminations every 3 months for families that report zero income, but reserves the right to do so if we suspect program abuse or fraud.

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