Sacramento Housing and Redevelopment AgencyLocal Government

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Eligibility The PHA must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: The Agency did not have adequate internal controls designed to ensure that reexaminations of family income and composition were performed at least once every 12 months. Questioned Costs: $251,056 Context: Testing of 60 HCVP files indicated that 23 instances where the annual recertification was not processed within regulatory period of 12 months. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, (2023-002) Recommendation: We recommend that management should implement a quality control review over a sampling of tenant files recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Agency did not have adequate internal controls designed to ensure that failed inspections are were completed in accordance with compliance requirements. Questioned Costs: $1,479 Context: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted in 1 of 40 files: -Inspection was cancelled, and in the process of rescheduling, it was not rescheduled for reinspection in a timely manner. Cause: The Agency failed to follow their HQS Enforcement procedures. Effect: The Agency was not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Repeat Finding: Yes, (2023-003) Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not meet requirements associated with HQS housing inspections. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-Housing Quality Standards Enforcement The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets 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)). Condition: The Agency did not have adequate internal controls designed to ensure that NSPIRE inspections were completed in accordance with compliance requirements. Questioned Costs: None Context: During the testing of 60 inspections, 1 instance was noted where no annual inspection had been completed since November 2022. Cause: The Agency failed to follow their inspection procedures. Effect: The Agency is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for a unit that did not meet these standards. Repeat Finding: No Recommendation: We recommend that the Agency review the controls in place to ensure that the inspections team can complete the reinspections in a timely manner and are knowledgeable of all internal procedures in place over inspections. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: CA005/CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Eligibility The PHA must do the following: (1) 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 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: The Agency did not have adequate internal controls designed to ensure eligibility requirements were being met for City and County. Questioned Costs: Unable to determine. Context: During the testing of the public housing program files for eligibility, the following deficiencies were noted in 16 of 40 files: - City : 8 instances where the annual certification was not completed on an annual basis. - County : 7 instances where the annual certification was not completed on an annual basis. - County: 1 instance where the annual recertification was not completed in 2024. The most recent annual recertification had been conducted in 2022. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Further, staff changes and tenants providing documentation in a delayed manner contributed to the issues observed. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, (2023-005) Recommendation: We recommend that management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grants Program Assistance Listing Number: 14.231 Federal Award Identification Number and Year: CA005/CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-Subrecipient Payments The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: The Agency did not have adequate internal controls designed to ensure that subrecipient payments are paid in accordance with compliance requirements. Questioned Costs: N/A Context: In 2023, 10 out of 29 payments to subrecipients were not done within 30 days as required by the grant. A follow-up selection was made in 2024 which also was not paid on time. Cause: The Agency did not sufficiently monitor controls to ensure compliance with program requirements over payments to subrecipients. Effect: The Agency is not in compliance with rules covering payments to subrecipients and the required 30 days. Repeat Finding: Yes, (2023-007) Recommendation: We recommend that management ensure that internal controls are in place to ensure subrecipient payments are paid timely and within program requirements. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Eligibility The PHA must do the following: (1) 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). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516). (5) Select tenants from the HCVP waiting list (see III.N.1, “Special Tests and Provisions – Selection from the Waiting List”) (24 CFR sections 982.202 through 982.207). Condition: The Agency did not have adequate internal controls designed to ensure HCV eligibility requirements were being met. Questioned Costs: $120,680 Context: During the testing of the HCV tenant files for Eligibility, the following deficiencies were noted in 21 of 40 files: -21 instances where the annual certification was not processed within regulatory period of 12 months. -1 instance where a tenant’s income, assets, and expenses were not supported. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months and documentation related to tenants income, assets and expenses. Repeat Finding: Yes, 2022-002 Recommendation: We recommend that management should implement a quality control review over a sampling of tenant files recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Special Tests and Provisions-Housing Quality Standards Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Agency did not have adequate internal controls designed to ensure that inspections were completed in accordance with HQS compliance requirements. Questioned Costs: None Context: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted in 4 of 40 files: -3 instances where the re-inspection was not completed and/or documented within 30 calendar days of the first failed inspection. -1 instance where the file did not contain documentation of the repairs have been made. -2 instances where the Agency failed to properly abate HAP payments after the second failed inspection. -1 instance where the Agency did not enforce its Administrative Plan-family obligations for tenant noncompliance. -1 instance where the file did not contain documentation showing the Agency provided landlord and tenant a notice of fail inspection. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Repeat Finding: Yes, 2022-005 Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Allowable Costs – Payroll In accordance with Uniform Grant Guidance (2 CFR Part 200), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Agency did not have adequate internal controls designed to ensure that allowable costs are recorded in accordance with compliance requirements. Questioned Costs: $392 Context: Out of the 40 files tested, 1 file was not charged to the correct program. Cause: The Agency did not sufficiently monitor controls to ensure compliance with payroll requirements. Effect: The Agency is not in compliance with federal regulations regarding allowable costs for payroll. Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Agency reviews the controls in place to ensure that payroll transactions are charged to the correct program. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Eligibility The PHA must do the following: (1) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: The Agency did not have adequate internal controls designed to ensure LIPH eligibility requirements were being met for City and County. Questioned Costs: Unable to determine. Context: Out of the 60 files tested, 2 were not reexamined timely in accordance with the compliance requirements. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, 2022-007 Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Period of Performance For federal awards, costs must not be incurred prior to the start of the period of performance unless authorized by the federal awarding agency or the pass-through entity. Condition: The Agency did not have adequate internal controls designed to ensure that period of performance requirements were being met. Questioned Costs: $1,117 Context: Out of the 5 costs tested, one cost was incurred prior to the period performance start date. Cause: The Agency failed to adhere to the compliance requirements related to period of performance. Effect: The Agency is not in compliance with period of performance requirements. Repeat Finding: Not a repeat finding Recommendation: We recommend that management ensure that internal controls are in place and operating effectively for period of performance requirements. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Special Tests The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: The Agency did not have adequate internal controls designed to ensure that subrecipient payments are paid in accordance with compliance requirements. Questioned Costs: None Context: Out of the 29 payments to subrecipients tested, 10 payments were not paid within 30 days. Cause: The Agency did not sufficiently monitor controls to ensure compliance with program requirements over payments to subrecipients. Effect: The Agency is not in compliance with federal regulations regarding subrecipient payments. Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Agency reviews the controls in place to ensure that subrecipient payments are paid timely and within program requirements. Views of Responsible Officials: There is no disagreement with the audit finding.

Condition: The Agency did not submit the required Federal Funding Accountably and Transparency Act reports for the first-tier subawards from funding received under the program. Criteria or Specific Requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Questioned Costs: None Effect: Noncompliance with reporting requirements for the federal program. Context: Federal Funding Accountability and Transparency Act reporting was not submitted related to first-tier subrecipients. Cause: The program manager did not know that additional reporting was required and still didn’t think it was required for the Agency. Repeat Finding: Yes, 2022-008 Recommendation: We recommend that the Agency provide additional training to program managers regarding the reporting requirements of the grant to ensure compliance requirements are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Earmarking The recipient may use up to 7.5 percent of its ESG program project costs for the payment of administrative costs related to the planning and execution of ESG activities (24 CFR section 576.108(a)). Condition: The Agency did not have adequate internal controls designed to ensure that earmarking requirements are met in accordance with compliance requirements. Questioned Costs: $37,140 Context: For the 2021 City ESG, the Agency drew $68,345 for administration of the $416,062 project costs or 16.4% of project costs. Cause: The Agency did not sufficiently monitor controls to ensure compliance with earmarking requirements. Effect: The Agency is not in compliance with earmarking requirements. Repeat Finding: No Recommendation: We recommend that the Agency reviews the controls in place to ensure that earmarking requirements are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Special Tests Contracts for the construction of affordable housing with 12 or more HOME-assisted units are required to comply with the Wage Rate Requirements (42 USC 12836). Condition: The Agency did not have adequate internal controls designed to ensure that wage rate requirements are met in accordance with compliance requirements. Questioned Costs: None Context: During our testing, we noted the following exceptions related to wage rate requirements. • For two of the five projects, the Agency does not have a monitoring process in place to ensure that the consultant hired to perform the duties related to certified payrolls is done correctly and in compliance with federal requirements. • For one of the five projects, the Agency was unable to provide supporting documentation evidencing compliance with wage rate requirements. Cause: The Agency did not sufficiently monitor controls to ensure compliance with wage rate requirements. Effect: The Agency is not in compliance with wage rate requirements. Repeat Finding: No Recommendation: We recommend that the Agency reviews the controls in place to ensure that wage rate requirements are met. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) 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). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 1 instance where the housing authority processed annual examination with a wrong calculation of income per EIV. Questioned costs: None Context: Out of 40 HCV tenant files tested, 1 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Repeat Finding: This is a Repeat finding. (2021-002) Recommendation: WE recommends management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Reporting HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition: The housing authority did not submit the HUD50058 to PIC in accordance with program compliance requirements. During the testing of the reporting of the 50058 to PIC, certain deficiencies were noted. Of the tenant files provided, 1 case occurred where the 50058 submitted to PIC did not agree with the 50058 in the tenant file reviewed during the eligibility sample. Questioned costs: None Context: Out of the 40 HCV tenant files tested, 1 tenant files 50058 did not agree to the 50058 submitted to PIC. Cause: The Authority failed to correct errors in the PIC system in a timely manner. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding. Repeat Finding: Not a repeat finding. Recommendation: WE recommends that the person assigned to submit the 50058s to PIC, assure the fatal errors and warnings are correctly in a reasonable time to avoid variances. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Special Tests and Provisions-Quality Control Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Condition: During the testing of the Housing Choice Voucher program tenant files for the quality control inspections, certain deficiencies were noted. Of the qualifying files tested, 3 files did not contain the documentation of QC inspections taking place. Questioned costs: None Context: Out of the 17 files tested, 3 contains errors as noted above. Cause: The Authority failed to re-schedule quality control inspections when scheduled QC inspections were inconclusive. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Repeat Finding: Not a repeat finding. Recommendation: WE recommends that the housing authority designate an individual to rev-schedule all inconclusive QC inspections. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -1 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -2 instances where the housing authority failed to propery abate HAP payments after the second failed inspection. Questioned costs: None Context: Out of the 40 files tested, 3 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Repeat Finding: This is a Repeat finding. (2021-004) Recommendation: WE recommends management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants (City) The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the LIPH for the City and County files certain special provision compliance deficiencies were noted. City -1 instances where the initial signed application was missing. -2 instances where the tenant file was missing a copy of the selection letter. -1 instance where the tenant was not selected in accordance with the PHA’s selection policies. County -3 instances where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 13 total files tested, 6 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the LIPH waiting lists. Repeat Finding: This is a Repeat finding. (2021-005) Recommendation: WE recommends management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: CA005/CA007 2022 Award Period: January 1, 2022 – December 31, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). The PHA must do the following: (1) 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 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR sections 960.253, 960.257, and 960.259). (a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities. Condition: During the testing of the LIPH tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -12 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -11 instances where the tenant file was missing the HUD9886. -11 instance where the tenant file was missing the housing authority general release of information form. -12 instances where the tenant file was missing the lease/rent adjustment letter. -12 instances where the tenant file was missing the recertification package/application. -12 instances where the rent posted per register did not agree with the rent per 50058. -16 instances where the annual recertification checklist was not completed. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -7 instance where the tenant file was missing the HUD9886. -7 instance where the tenant file was missing the housing authority general release of information form. -9 instances where the tenant file was missing the lease/rent adjustment letter. -7 instances where the tenant file was missing the recertification package/application. -10 instances where the rent posted per register did not agree with the rent per 50058. -21 instances where the annual recertification checklist was not completed Questioned costs: None Context: Out of the 60 files tested for the City, 16 contains errors as noted above. Out of the 60 files tested for the county, 27 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the LIPH waiting lists. Repeat Finding: This is a Repeat finding. (2021-006) Recommendation: WE recommends management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing & Urban Development (HUD) Federal Program Name: Community Development Block Grants/Entitlements Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0003/B-21-UC-06-0005/2021 Award Period: January 1, 2022, to December 31, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Agency did not submit the required Federal Funding Accountably and Transparency Act report for the first-tier subawards from funding received under the program. Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Questioned Costs: None Effect: Noncompliance with reporting requirements for the federal program. Context: Federal Funding Accountability and Transparency Act reporting was not submitted related to first-tier subrecipients. Cause: The program manager did not know that additional reporting was required. Repeat Finding: Yes Recommendation: We recommend that the Agency provide additional training to program managers regarding the documentation of program compliance requirements and the development of internal controls to ensure that all compliance requirements are met. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) 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). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the Public and Indian Housing for the City and County files certain special provision compliance deficiencies were noted. City -2 instances out of 9 files reviewed where the initial signed application was missing. County -3 instances out of 5 files reviewed where the initial signed application was missing. -2 instances out of 5 files reviewed where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 14 total files tested, 5 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-006 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). b. The PHA must do the following: (1) 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 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly, displaced, or a person with disabilities. Condition: During the testing of the Public and Indian Housing tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -33 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -2 instances where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -33 instances where the tenant file was missing the lease/rent adjustment letter. -33 instances where the tenant file was missing the recertification package/application. -8 instances where the rent posted per register did not agree with the rent per 50058. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -1 instance where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -5 instances where the tenant file was missing the lease/rent adjustment letter. -5 instances where the tenant file was missing the recertification package/application. -3 instances where the rent posted per register did not agree with the rent per 50058. Questioned costs: None Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the County, 11 contained errors, as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing & Urban Development (HUD) Federal Program Name: Community Development Block Grants/Entitlements Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0003/B-21-UC-06-0005/2021 Award Period: January 1, 2021, to December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Agency did not submit the required Federal Funding Accountably and Transparency Act report for the first-tier subawards from funding received under the program. Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Questioned Costs: None Effect: Noncompliance with reporting requirements for the federal program. Context: Federal Funding Accountability and Transparency Act reporting was not submitted related to first-tier subrecipients with total awards passed through of $3,152,860. Cause: The program manager did not know that additional reporting was required. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Agency provide additional training to program managers regarding the documentation of program compliance requirements and the development of internal controls to ensure that all compliance requirements are met. Views of responsible officials: There is no disagreement with the audit finding.

2020-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Continuum of Care Assistance Listing Number: 14.267 Award Period: January 1, 2020 ? December 31, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Special Tests ? Rent Reasonableness: Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space (24 CFR section 578.49(b)(1)). Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants (24 CFR sections 578.49(b)(2) and 578.51(g) and (j)). Condition: During our testing, we noted the Agency did not have adequate internal controls designed to ensure that rent was reasonable prior to the rent going into effect. Questioned costs: None Context: During our testing, it was noted that 8 out of 13 rent reasonableness determination forms were not signed and approved by a case worker. Cause: The COVID-19 Pandemic has immensely impacted FY20 and staff converted to telework due to the pandemic. Staff did not have the capability to print and sign the rent determination forms at the same volume as they could when they were in office. This has contributed to a longer processing time for staff for rent increase requests. Effect: Rents could go into effect that are not considered to be reasonable. The lack of internal controls over this compliance requirement provides an opportunity for noncompliance. Recommendation: We recommend the Agency design controls to ensure an adequate review process is in place to review potential rent changes to determine that they are reasonable in comparison to similar units. Views of responsible officials: There is no disagreement with the audit finding.

2020-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Continuum of Care Assistance Listing Number: 14.267 Award Period: January 1, 2020 ? December 31, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Special Tests ? Rent Reasonableness: Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space (24 CFR section 578.49(b)(1)). Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants (24 CFR sections 578.49(b)(2) and 578.51(g) and (j)). Condition: During our testing, we noted the Agency did not have adequate internal controls designed to ensure that rent was reasonable prior to the rent going into effect. Questioned costs: None Context: During our testing, it was noted that 8 out of 13 rent reasonableness determination forms were not signed and approved by a case worker. Cause: The COVID-19 Pandemic has immensely impacted FY20 and staff converted to telework due to the pandemic. Staff did not have the capability to print and sign the rent determination forms at the same volume as they could when they were in office. This has contributed to a longer processing time for staff for rent increase requests. Effect: Rents could go into effect that are not considered to be reasonable. The lack of internal controls over this compliance requirement provides an opportunity for noncompliance. Recommendation: We recommend the Agency design controls to ensure an adequate review process is in place to review potential rent changes to determine that they are reasonable in comparison to similar units. Views of responsible officials: There is no disagreement with the audit finding.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION