Housing Authority of the County of Contra CostaLocal Government

U.S. Department of Housing and Urban Development: The Housing Authority of the County of Contra Costa respectfully submits the following corrective action plan for the year ended March 31, 2025. Auditor: Novogradac and Company, LLP Certified Public Accountants 1144 Hooper Avenue Suite 203 Toms River, New Jersey 08753 The findings from the March 31, 2025 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 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Assistance Listing Number: 14.871, 14.879 and 14.EHV Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 11,032 units. Of a sample size of sixty-nine (69) tenant files, the following was noted: - Declaration of Section 214 Status form was missing in one (1) file - HUD-9886 Authorization for Release of Information was missing in six (6) files - Lead based paint form was missing in one (1) file - HUD-50058 Form applicable to the audit period was missing in seven (7) files Our sample size is statistically valid. Known Questioned Costs: $168,325 Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.. Views of responsible officials and planned corrective action: We agree with the Auditor’s observations on the inspection of the tenant files and will implement internal control procedures that will ensure compliance of federal regulations. HACCC identified two primary causes of the deficiency and has outlined corrective measures to address them. Firts, HACCC recognized the need for improved training on supervisory tools used to monitor recertification deadlines. Management was retrained in November 2025 on the use of WorkQueue oversight tools and on conducting daily team stand-up meetings to reinforce production goals. Key performance indicators from these meetings flow to management reports and executive leadership for ongoing monitoring. Second, HACCC'S HCV program partnered with Paul Edwards Management and Consulting (PEM) on May 1, 2024. This partnership provided HACCC's HCV program with technical assistance and coverage of positions which had remained vacant from 2021 until recently. Ingrid Layne, Director of Assistance Housing, will be responsible to implement this corrective action by March 31, 2026.

2024-002

Finding 2024-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers and Emergency Housing Vouchers Programs Assistance Listing Number: 14.871, 14.879 and 14.EHV Noncompliance - N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency 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. Condition: Based upon inspection of the Authority's files and on discussions with management, the Authority did not properly abate one (1) out of thirty-seven (37) annual failed inspections selected for testing. Context: The Authority did not properly abate one (1) out of thirty-seven (37) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Our sample size is statistically valid. Known Questioned Costs: $398 Cause: There is a significant deficiency 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 Housing Voucher Cluster is in 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 and the compliance supplement. Views ofresponsible officials and planned corrective action: Of the Thirty-Seven (37) tenant files audited, one (1) tenant file contained a deficiency--- the file did not contain adequate verification of the abatement cure request date justifying the HACCC's subsequent cancellation of this abatement after the deficiencies were verified as corrected. The HACCC discovered a contributing factor for this deficiency and identified a plan to ensure compliance with this requirement which is detailed below. HUD requires HACCC's Housing Choice Voucher program to abate (permanently withhold) housing assistance payments no later than the first of the month following the specified correction period (including any approved extension) when HQS deficiencies are discovered during biennial HQS inspections of subsidized units. To improve housing opportunities to families with vouchers and support landlord retention on our programs, the HACCC (in accordance with applicable regulations) offers to end the period of HAP abatement "effective on the earlier of the day the unit passes inspection or the date the correction was reported completed' as a courtesy. In this case, the unit failed inspection for non-life threatening deficiencies (ex. overgrown grass) on 6/20/2023. The deficiencies were not corrected prior to the reinspection which took place on 7/18/2023, prompting the placement of a HAP abatement on 7/26/2023 to withhold all HAP payments effective 8/1/2023 on. A reinspection was requested and the unit passed inspection in August. On 8/31/23 the abatement was subsequently cancelled in the HACCC's software and a memo was entered indicating that the landlord had requested the abatement cure reinspection prior to the abatement effective date of 8/1/23. However, it was discovered that the necessary verification of this abatement cure request was not attached to the tenant record. Due to the HACCC's inability to reproduce verification of the request date (being earlier than the day the unit passed inspection), the HACCC agrees with this finding. To ensure compliance with this requirement, the Internal HCV Inspection Procures will be updated to include systems for ensuring that necessary verification of any abatement cure request date is stored. A File Memo containing a timeline and necessary verification ofrequest date will be submitted to a manager for approval any time an abatement is ended or cancelled. The manager will be responsible for storing the executed File Memo and verification in the tenant file. The Authority has recognized the deficiencies in the Housing Voucher Cluster and has implemented internal control procedures that will ensure compliance of federal regulations. Ingrid Layne, Director of Assisted Housing, will be responsible to implement this corrective action by March 31, 2025.

2023-001

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers and Emergency Housing Vouchers Programs Assistance Listing Number: 14.871, 14.879 and 14.EHV Noncompliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority's files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 9,051 units. Of a sample size of eighty-nine (89) tenant files, the following was noted: • HUD-9886 Authorization for Release of lnformation was missing in 4 files Our sample size is statistically valid. Known Questioned Costs: $24,363 Cause: There is significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: Of the Eighty Nine (89) tenant files audited, four (4) tenant files contained a deficiency in the same indicator---the Authorization for the Release of lnformation/ Privacy Act Notice (HUD Form 9886) retained in the tenant file was executed after the audit date range, not within the audit period (4/1/23- 3/31/24) or within the three months prior. The HACCC discovered two contributing factors for this deficiency and identified a plan to ensure compliance with this requirement which is detailed below. First, the HACCC's Housing Choice Voucher program entered into a partnership with Paul Edwards Management and Consulting (PEM) on May 1st 2024. This partnership provides the HACCC's Housing Choice Voucher program with technical assistance and coverage of vacant positions within the Housing Choice Voucher program Continued Eligibility team. The PEM team members assigned to Continued Eligibility are responsible for completing timely Annual Recertifications for all assigned Housing Choice Voucher program participants---including the collection of any signature documents required by HUD annually. To ensure compliance with this requirement, contract performance indicators related to those positions temporarily assigned to PEM (including the timeliness of Annual Recertifications and a consolidated report of findings within the Electronic File Protocol Quality Control Audit Checklists) will be included in a corrective action plan. The enhanced monitoring provided by the corrective action plan will a) ensure the continued collection of the performance indicator data and b) provide timely feedback regarding the partnerships ability to mediate the deficiency. Second, HUD removed the expiration date from the 9886 form. Effective 01/01/2024, HUD requires Housing Authorities to collect a signature on the 9886 form once throughout the course of participation instead of requiring Housing Authorities to collect a signature on the form annually (or every 15 months). HUD issued PIH Notice 2023-27 on 09/29/2023. The notice indicated "In accordance with the final rule, all applicants must sign the consent form at admission, and participants must sign the consent form no later than their next interim or regularly scheduled income reexamination. After an applicant or participant has signed and submitted a consent form either on or after January 1, 2024 (regardless of the PHA/MFH Owner's compliance date), they do not need to sign and submit subsequent consent forms at the next interim or regularly scheduled income examination ... ". The HACCC' s Housing Choice Voucher program began to request tenant signatures on the updated 9886 form effective 1/1/2024 (within our online recertification workflows) and effective 3/29/24 (within our paper recertification packets). Internal procedures for the storage of electronic documents ("HACCC Electronic File Protocol") related to the 9886 form were updated in accordance with the change, to in effect, retain the 9886 document as any other "vital document" or one-time verification would be stored and retained (ex. birth certificate, social security card, etc)--- storing and retaining only the most recent version of the document. The HACCC agrees that the requirement to retain a 9886 executed within the audit date range for these 4 files was not fulfilled despite the above-mentioned updates taking place within the audit date range. To ensure compliance with this requirement, Electronic File Protocol QC Checklist Procedure Training will be included in a corrective action plan. The training requirement will a) ensure the continued collection and review of the Electronic File Protocol Quality Control reports and b) provide timely feedback regarding whether having a single retention requirement applied throughout an entire fiscal year will effectively mediate this deficiency. We agree with the Auditor's observations on the inspection of the tenant files and will implement internal control procedures that will ensure compliance of federal regulations. Ingrid Layne, Director of Assisted Housing, will be responsible to implement this corrective action by March 31, 2025.

2023-002

Finding 2023-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Mainstream Vouchers Assistance Listing Number: 14.879 Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency 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. Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority did not properly abate one (1) out of eight (8) annual failed inspections selected for testing. Context: The Authority did not properly abate one (1) out of eight (8) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Our sample size is statistically valid. Known Questioned Costs: $6,984 Cause: There is significant deficiency 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. Effect: The Mainstream Vouchers Program is in 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 and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Program and has implemented internal control procedures in 2023 that will ensure compliance of federal regulations. Those controls consist of the weekly monitoring of a report generated by the agency business software which identifies units that need abatements that leverages new categories from a new inspection template implemented in 2023. That report is compared to te manually gathered report for units in need of abatement that is provided by the inspections vendor. Ingrid Layne, the Director of Assisted Housing will be responsible to implement this corrective action by March 31, 2024.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers, Mainstream Vouchers, Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, 14.EHV (the “Housing Voucher Cluster”) Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 8,789 units. Of a sample size of eighty-seven (87) tenant files, the following was noted: • HUD-9886 Authorization for Release of Information was missing in 8 files • Annual 50058 form was missing in 7 files • Verification of income and assets was missing in 10 files • Annual inspection report was missing in 2 files Our sample size is statistically valid. Known Questioned Costs: $216,820 Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor on the inspection of tenant files and has made arrangements to comply with the compliance requirements of the Housing Voucher Cluster. The added controls will consist of additional training that will be completed by Continued Eligibility staff related to the Electronic File Protocol and the procurment of an IT vendor that will develop reports to identify missing SharePoint attachments within electronic tenant files. Ingrid Layne, the Director of Assisted Housing will be responsible to implement this corrective action by March 31, 2024.

Corrective Action Plan For the year ended March 31, 2022 U.S. Department of Housing and Urban Development: The Housing Authority of the County of Contra Costa respectfully submits the following corrective action plan for the year ended March 31, 2022. Auditor: Novogradac and Company, LLP Certified Public Accountants 1144 Hooper Avenue Suite 203 Toms River, New Jersey 08753 The findings from the March 31, 2022 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 2022-001 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: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Findings ? Federal Award Program Audit (continued) Finding 2022-001 (continued) 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 units that did not have annual inspections or owner?s certifications performed during the audit period. Context: Of a sample size of sixty-five (65) tenant files, the following information was unavailable for examination at the time of audit: ? Annual inspection report or owner?s certification was missing in two (2) files Our sample size is statistically valid. Known Questioned Costs: $41,038 Cause: There is significant deficiency 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. Effect: The Section 8 Housing Choice Vouchers Program is in 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 and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Program and has implemented internal control procedures in 2022 that will ensure compliance of federal regulations. Those controls consist of the weekly monitoring of two reports generated by the agency business software which identify subsidized units missed by the inspection scheduler. Ingrid Layne, the Director of Assisted Housing will be responsible to implement this corrective action by March 31, 2023. Schedule of Prior Year Federal Audit Findings There were no findings or questioned costs in the prior year. If the U.S. Department of Housing and Urban Development has any questions regarding this plan, please call Ingrid Layne, the Director of Assisted Housing at (925) 957-7010. Sincerely yours, Ingrid Layne, Director of Assisted Housing