Housing Authority of the County of MontereyLocal Government

Finding 2025-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 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 4,419 units. Of a sample size of fifty-eight (58) tenant files, the following was noted: Original application was missing in 4 files HUD-9887 form was missing in 1 file Lead based paint form was missing in 7 files Signed lease was missing in 8 files Verification of income and assets was missing in 7 files. Our sample size is statistically valid. Known Questioned Costs: $272,542. Cause: There is a material weakness in the Housing Voucher Cluster 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. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2025-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were inspection reports that were unavailable for examination at the time of audit.. We were unable to determine if the Authority properly abated or provided proper extension documentation for failed inspections selected for testing. Context: The Authority was unable to provide inspection reports for two (2) out three (3) failed inspections selected for testing, therefore we were unable to determine if the unit passed reinspection within the required time. 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). Known Questioned Costs: Unknown Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. 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 special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2025-003: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Material Noncompliance – N. Special Tests and Provisions – HQS Inspections Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family at least biennially to determine if the unit meets HQS standards 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)). These inspection reports 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 inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of fifty-eight (58) units, twenty-one (21) units did not have a biennial HQS inspection performed. Our sample size is statistically valid. Known Questioned Costs: $243,722 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. Effect: The Housing Voucher Cluster 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 and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2025-004: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy. Context: Twenty-five (25) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that fourteen (14) out of twenty-five (25) new move-ins selected could not be traced with any certainty back to the Authority's waiting list. Known Questioned Costs: $278,450 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list. 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 special tests and provisions type of compliance related to selections from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2025-005: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions - Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract)(24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Based upon inspection of the Authority’s files and discussion with management, there were newly leased units for which the evaluation of rent reasonableness was not performed. Context: There were approximately 782 newly leased units. Of a sample size of twenty-five (25) newly leased units, seven (7) unit's documentation of reasonable rent was not available for examination. Our sample size is statistically valid. Known Questioned Costs: $20,867 Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the significant deficiency in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 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 3,785 units. Of a sample size of fifty-eight (58) tenant files, the following was noted: Seven tenant files were missing entirely Original application was missing in 1 file Declaration of Section 214 Status form was missing in 1 file HUD-9887 form was missing in 1 file Lead based paint form was missing in seven files Signed lease was missing in 8 files HUD-50058 form was missing in 1 file Verification of income and assets was missing in 2 files Our sample size is statistically valid. Known Questioned Costs: $297,971. Cause: There is a material weakness in the Housing Voucher Cluster 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. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension. Condition: Based upon inspection of the Authority’s files and on discussion with management, the Authority did not properly abate or provide proper extension documentation for failed inspections selected for testing. In addition, there were inspection reports that were unavailable for examination at the time of audit. Context: The Authority did not provide proper extension documentation or properly abate seven (7) out of twenty-seven (27) failed inspections selected for testing. Additionally, the Authority was unable to provide inspection reports for four (4) out twenty-seven (27) failed inspections selected for testing, therefore we were unable to determine if the unit passed reinspection within the required time. 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). Known Questioned Costs: $31,398. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. 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 special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Material Noncompliance – N. Special Tests and Provisions – HQS Inspections Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family at least biennially to determine if the unit meets HQS standards 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)). These inspection reports 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 inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of fifty-eight (58) units, sixteen (16) units did not have a biennial HQS inspection performed. Our sample size is statistically valid. Known Questioned Costs: $325,733. 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. Effect: The Housing Voucher Cluster 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 and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Catalog Numbers: 14.871, 14.879, and 14.EHV Noncompliance – L. Reporting - Special Reporting Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Reporting Criteria: The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members 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, the Authority miscalculated tenant income during annual reexaminations. Context: Of a sample size of fifty-eight (58) tenant files, three (3) tenant's annual recertification (HUD-50058 form) included income that was miscalculated. Our sample size is statistically valid. Known Questioned Costs: $32,407. Cause: There is a significant deficiency in internal controls over the compliance for the reporting type of compliance related to special reporting. The Authority has not maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the reporting type of compliance related to special reporting. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster to ensure that established internal control policies are being followed accurately and on a timely basis.

Finding 2024-006: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy. Context: Forty-two (42) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that thirty-eight (38) out of forty-two (42) new move-ins selected could not be traced with any certainty back to the Authority's waiting list. Known Questioned Costs: $741,293. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list. 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 special tests and provisions type of compliance related to selections from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions - Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions. Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Based upon inspection of the Authority’s files and discussion with management, there were newly leased units for which the evaluation of rent reasonableness was not performed. Context: There were approximately 821 newly leased units. Of a sample size of forty-two (42) newly leased units, one (1) unit's documentation of reasonable rent was not available for examination. Our sample size is statistically valid. Known Questioned Costs: $16,685. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the significant deficiency in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 and 14.EHV Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Significant Deficiency in Internal Control over Compliance for Eligibility: Emergency Housing Vouchers Material Weakness in Internal Control over Compliance for Eligibility: Section 8 Housing Choice Vouchers Program 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 3,328 units. Of a sample size of fifty-four (54) tenant files, the following was noted: One tenant file was missing entirely, Original application was missing in 6 files, Lead based paint form was missing in 3 files, Signed lease was missing in 3 files. Our sample size is statistically valid. Known Questioned Costs: $88,087. Cause: There is significant deficiency in the Emergency Housing Vouchers Program and a material weakness in the Section 8 Housing Choice Vouchers Program 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 Emergency Housing Vouchers Program is in non-compliance and the Section 8 Housing Choice Vouchers Program 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. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension. Condition: Based upon inspection of the Authority’s files and on discussion with management, the Authority did not properly abate four (4) out of eleven (11) annual failed inspections selected for testing. Context: The Authority did not properly abate four (4) out of eleven (11) 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). Known Questioned Costs: $7,011 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. 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 material non-compliance with the special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers Program and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2023-005: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program and Mainstream Vouchers Program Federal Assistance Listing Numbers: 14.871 and 14.879 Material Noncompliance – N. Special Tests and Provisions – HQS Inspections Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family at least biennially to determine if the unit meets HQS standards 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)). These inspection reports 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 inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of fifty-four (54) units, twenty-seven (27) units did not have a biennial HQS inspection performed. Our sample size is statistically valid. Known Questioned Costs: $239,802. 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. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are 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 and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 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. s. Of a sample size of forty (40) tenant files, the following was noted: Original application was missing in 7 files Lead based paint form was missing in 2 files Signed lease was missing in 19 files. Our sample size is statistically valid. Known Questioned Costs: $178,494. 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 Section 8 Housing Choice Vouchers Program 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. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program and Mainstream Vouchers Program Federal Assistance Listing Numbers: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension. 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. 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: The Authority was unable to provide us with a listing of failed inspections during the year under audit. The Authority did not annual perform inspections or obtain owner's certifications in lieu of annual inspections to determine if the units meet the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: Unknown Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. 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 and Mainstream Vouchers Programs are in material non-compliance with the with the special tests and provisions type of compliance related to HQS enforcement. 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. Authority Response: 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 and Mainstream Vouchers Programs and will implement internal control procedures that will ensure compliance of federal regulations, including PIH notices.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program and Mainstream Vouchers Program Federal Assistance Listing Numbers: 14.871 and 14.879 Material Noncompliance – N. Special Tests and Provisions – HQS Inspections Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the 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)). These inspection reports 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 inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of forty-three (43) units, thirty-six (36) units did not have a biennial HQS inspection performed. Our sample size is statistically valid. 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. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are 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 and the compliance supplement. Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 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 3,383 units. Of a sample size of forty (40) tenant files, the following was noted: Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 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 3,383 units. Of a sample size of forty (40) tenant files, the following was noted:  Original application was missing in 3 files  Lead based paint form was missing in 5 files  Signed lease was missing in 5 files  Rent reasonableness was missing in 10 files  Annual inspection report was missing in 15 files. Our sample size is statistically valid. Known Questioned Costs: $294,952. 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 Section 8 Housing Choice Vouchers Program 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. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward.

Finding 2019-004: 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 ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility. 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 3,239 units. Of a sample size of thirty-nine (39) tenant files, the following was noted: ? HUD 9887 Form was missing in 1 file ? Verification of income and assets was missing in 1 file. Our sample size is statistically valid. Known Questioned Costs: $10,909. Cause: There is a 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 Section 8 Housing Choice Vouchers Program 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. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward.

Finding 2019-005: 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 ? Waiting List Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Section 8 Housing Choice Vouchers Program administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). move-in list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Section 8 Housing Choice Vouchers Program were selected from the wait list in an order that is in accordance with the Authority?s policy. Context: Twenty five (25) names were selected from the new move-in list and those names were to be traced to the waiting list to verify that the new move-ins were chosen in an order that was in accordance with the Authority?s policy. It was determined that fourteen (14) out of twenty five (25) new move-ins selected could not be traced with any certainty back to the Authority's waiting list. Known Questioned Costs: $152,726 Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance. 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 special tests and provisions type of compliance related to selections from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: We agree with the Auditors' findings. The identified finding occurred under a prior administration at the Authority. The Authority will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.

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