RICHMOND HOUSING AUTHORITYState Government

Finding SA2021-001: Internal Control AL number: 14.850 and 14.872 AL Title: Public and Indian Housing, and Public Housing Capital Fund Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: Public Housing Authorities (PHA) are required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Condition: During our audit, we were unable to obtain an understanding of the internal controls over the federal awards of the Authority, as current personnel could not respond to the processes and procedures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide any information regarding the internal controls of the Authority. Effect: The Housing Authority is not in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Identification as a repeat finding: Yes, since 2019. Recommendation: The Housing Authority must develop procedures to ensure that there is an internal control environment in compliance with the federal requirements. Management Response: The City has assigned staff to specific duties to support the Authority’s financial operations. Staff have implemented new processes that align with the City’s policies and procedures, while also in accordance with HUD regulations and requirements, to improve the integrity and accuracy of the Authority’s financial reporting and management of federal awards. The procedures ensure separation of duties and levels of approval to handle and manage federal funds. Staff also continue to attend trainings to understand Federal statutes and regulations.

Finding SA2021-002: Lack of Supporting Documentation for Expenditures AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: 2 CFR part 200, subpart E, costs charged to federal funds must be allowable, reasonable, and properly documented. Costs should be adequately supported to demonstrate they were necessary and directly related to the deferral programs. Condition: During our audit, we tested a sample of 60 transactions. Of these, 14 transactions with amount $151,619 lacked sufficient supporting documentation to verify the nature and allowability of the expenditures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide supporting and documentation was not properly maintained, resulting in missing records to support certain expenditures. Effect: The Housing Authority may have charged unallowable costs to the Operating Fund, resulting in noncompliance with federal requirements. Questioned Costs: We question the costs in the amount of $151,619 noted above. Recommendation: The Housing Authority should develop and implement procedures to ensure that all required documentation related to public housing expenditures is properly maintained and supported. Staff responsible for approving and managing these records should be trained to ensure they understand and comply with applicable program requirements. Management Response: The Authority acknowledges this finding. Staff have implemented procedures requiring that all invoices, contracts, purchase orders, and supporting records be scanned and attached in MUNIS at the time of processing. A new review workflow ensures supervisory approval before expenditures are charged to federal funds. The Authority is conducting retroactive file recovery where possible and implementing staff training on documentation requirements under 2 CFR Part 200. These improvements will ensure expenditures are fully supported, allowable, and readily accessible for audit.

Finding SA2020-003: Operating Subsidy Payments Supporting Documentation AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: 24 CFR section 990 requires Public Housing Authorities (PHA) to provide operating subsidies to public housing projects and document the specific calculation requirements through HUD Form 52723. Condition: During our audit, we noted that operating subsidy payments totaling $582,050 were made to Easter Hill for Richmond Village I, II, and III during fiscal year 2021. While RHA provided the calendar year 2021 Form 52723, no Form 52723 for calendar year 2020 were available. As a result, we were unable to reconcile the subsidy payments and determine whether the subsidy amounts were properly calculated in accordance with the requirements of 24 CFR Part 990. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide supporting and documentation was not properly maintained, resulting in missing records to support certain expenditures. Effect: We were unable to determine whether the Housing Authority is in compliance with the calculation requirements of HUD Form 52723, as outlined in 24 CFR Section 990. Questioned Costs: We question the costs in the amount of $582,050 noted above. Identification as a repeat finding: Yes, since 2019. Recommendation: The Housing Authority should establish a procedure to appropriately reconcile the Form 52723 and subsidy payments ensuring that proper documentation is maintained and readily accessible for future audits. Management Response: The Authority agrees with the recommendation. The Authority will ensure that all operating subsidy requests are fully supported by the correct HUD Form 52723 documentation. Staff will develop a reconciliation process to confirm that subsidy payments align with HUD‑required calculations and that both current‑year and prior‑year forms are maintained for audit. The Authority will coordinate with property management partners to ensure supporting documentation is provided before subsidy drawdowns occur, and all records will be stored in accordance with HUD retention requirements.

Finding SA2021-004: Missing Tenant Documents AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: 24 CFR section 960 requires Public Housing Authorities (PHA) that receive public housing funds to remit payment to eligible tenants and to maintain documentation for the payments through a contract. Condition: We reviewed 51 tenant files for existing and new tenants for FY2021 and noted that the Authority did not maintain all required documentation. Furthermore, approximately 69% of the tenants are missing some required forms and documents, and 7 of the tenants have no related tenant personnel files and documents for FY2021. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide such documentation. Effect: The Housing Authority is not in compliance as stated in 24 CFR section 960. Identification as a repeat finding: Yes, since 2017. Recommendation: The Housing Authority must develop procedures to ensure that all required documentation for public housing tenants is properly maintained and readily accessible for future audits. Management Response: As part of ongoing efforts to strengthen file integrity and compliance standards, the Authority has implemented the following measures: • Standardized File Checklist: A comprehensive checklist has been developed and is included in all resident files. This tool is designed to ensure that all required documentation is accounted for and consistently organized. • Dedicated File Oversight Personnel: The Authority has hired designated staff responsible for the oversight, organization, and quality control of file documentation. These individuals will ensure ongoing compliance with HUD regulations and internal standards, as well as support audit readiness. • Income Certification Systemization: All income calculations for resident certifications are now completed and documented exclusively within the Property Management system, Yardi One. This centralizes data processing, improves accuracy, and ensures a reliable audit trail for all income determinations.

Finding SA2021-005: Lack of documentations for Declaration of Trust (DOT) and Declaration of Restrictive Covenants (DORC) AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: 24 CFR section 905 required non-federal entities including Public Housing Authorities (PHA) are required to maintain current or valid DOT or DORC recorded against all public housing properties that have received funding under the U.S. Housing Act of 1937. Condition: During our audit, we noted that the DOTs provided for certain housing properties are outdated and didn’t reflect subsequent modernization improvements. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide the supporting documents. Effect: The Housing Authority is not compliance with the HUD requirements as stated in 24 CFR section 905. Recommendation: The Housing Authority should maintain a list of all owned and insured properties, including land, non-residential facilities, and modernization efforts, and ensure that each property has a current and valid DOT/DORC on record. Management Response: The Authority maintains a comprehensive list of all owned and insured assets within our Asset Repositioning strategy document. In alignment with the recommendation, the Housing Authority will establish an electronic filing system to securely store all declarations of trust. In accordance with PHI Notice 2014-14, the Housing Authority will formally request the release of the Declaration of Trust (DOT) from HUD prior to the closing or transfer of the title of any public housing property.

Finding SA2021-006: CARES Act Funding FDS Reporting AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: In accordance with Notice PIH 2020-24, Public Housing Authorities (PHAs) that received CARES Act funding are required to include a separate reporting column in Financial Data Schedule (FDS) in its FASS-PH submission. Condition: During our review of unaudited FDS, we noted a separate column for CARES Act funding was not included as required by PIH Notice 2020-24. Cause: The staff was unaware that CARES Act funding need to report in a separate column in FDS. Effect: We were unable to verify the accuracy and completeness of the CARES Act expenditures reported in FDS. Recommendation: We recommend that Housing Authority implement a process to ensure that a separate column for CARES Act funding is included in the audited FDS submissions for FY2021 and future submissions in accordance with PIH Notice 2020-24. Management Response: The Authority acknowledges this finding. Staff were not aware of the requirement to use a separate FDS reporting column for CARES Act funds. Updated procedures now include mandatory review of HUD PIH Notices and reporting standards prior to annual submission. The Authority will ensure all future FASS‑PH filings include the required separate column for CARES Act expenditures, and staff assigned to FDS reporting will complete additional HUD training to avoid recurrence. Staff will implement CARES Act funding column during 2021 Audited FDS submission.

Finding SA2021-007: UEL Formula (Form 52722) – Utility Expense Reporting AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: Accounting to 24 CFR 990.170, the Utility Expense Level (UEL) is used to calculate the utility portion of the Operating Fund subsidy. Public Housing Authorities (PHAs) must retain utility consumption and costs data pursuant to 990.325 and report it on Form 52722. Condition: During our audit, we noted that the Authority filed Form 52722; however, the supporting documentation for utility consumption and cost data was not available, as the Authority was unable to retrieve the related backup records for review. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide the supporting documents. Effect: We were unable to verify the accuracy and completeness of the utility consumption and cost data reported to Form 52722. Recommendation: The Housing Authority should strengthen its internal control procedures to ensure that all utility invoices and supporting documentation are accurately retained, readily accessible in the future audit. Management Response: The Authority agrees with the finding. Procedures are being enhanced to ensure all utility invoices, consumption data, and related backup documentation are retained and filed systematically. Staff will maintain a complete utility expense folder for each fiscal year and ensure that Form 52722 submissions are fully supported. Training and periodic internal reviews will be established to verify compliance with 24 CFR 990.170 and 990.325.

Finding SA2020-001: Internal Control AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: Public Housing Authorities (PHA) are required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Condition: During our audit, we were unable to obtain an understanding of the internal controls over the federal awards of the Authority, as current personnel could not respond to the processes and procedures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide any information regarding the internal controls of the Authority. Effect: The Housing Authority is not in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Identification as a repeat finding: Yes, since 2019. Recommendation: The Housing Authority must develop procedures to ensure that there is an internal control environment in compliance with the federal requirements. Management Response: The City has assigned staff to specific duties to support the Authority’s financial operations. Staff have implemented new processes that align with the City’s policies and procedures, while also in accordance with HUD regulations and requirements, to improve the integrity and accuracy of the Authority’s financial reporting and management of federal awards. The procedures ensure separation of duties and levels of approval to handle and manage federal funds. Staff also continue to attend trainings to understand Federal statutes and regulations.

Finding SA2020-002: Lack of Supporting Documentation for Expenditures AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 2 CFR part 200, subpart E, costs charged to federal funds must be allowable, reasonable, and properly documented. Costs should be adequately supported to demonstrate they were necessary and directly related to the deferral programs. Condition: During our audit, we tested a sample of 51 transactions. Of these, 5 transactions with amount $46,490 lacked sufficient supporting documentation to verify the nature and allowability of the expenditures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide supporting and documentation was not properly maintained, resulting in missing records to support certain expenditures. Effect: The Housing Authority may have charged unallowable costs to the Operating Fund, resulting in noncompliance with federal requirements. Questioned Costs: We question the costs in the amount of $46,490 noted above. Recommendation: The Housing Authority should develop and implement procedures to ensure that all required documentation related to public housing expenditures is properly maintained and supported. Staff responsible for approving and managing these records should be trained to ensure they understand and comply with applicable program requirements. Management Response: The Authority understands and accepts the recommendation to ensure that all required documentation is maintained and accessible. The Authority staff will follow the City’s processes by having management review invoices/charges for approval then will be scanned and attached to the payment records in MUNIS. In addition, the delay in timing to review and audit these records have allowed for documents to be transferred offsite and not easily accessible.

Finding SA2020-003: Operating Subsidy Payments Supporting Documentation AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR section 990 requires Public Housing Authorities (PHA) to provide operating subsidies to public housing projects and document the specific calculation requirements through HUD Form 52723. Condition: During our audit, we noted that operating subsidy payments totaling $728,553 made to Easter Hill for Richmond Village I, II, and III during fiscal year 2020 were not supported by HUD Form 52723. As a result, we were unable to determine whether the subsidy amounts were properly calculated in accordance with the requirements of 24 CFR Part 990. Cause: Due to staffing shortage, operating subsidy payments were paid in a lump sum without attaching detailed supporting documents. Effect: The Housing Authority is not in compliance with the specific calculation requirements of HUD Form 52723 as specified in 24 CFR section 990. Questioned Costs: We question the costs in the amount of $728,553 noted above. Identification as a repeat finding: Yes, since 2019. Recommendation: The Housing Authority must develop procedures to ensure that all operating subsidy payments made are supported by HUD Form 52723 and in accordance with 24 CFR section 990. Management Response: The operating subsidy payments to Easter Hill Development for the properties Richmond Village I – III are processed based on the property management’s request. The amount paid can differ from the Form 52723 which reflects the eligible amount for the calendar year ending December 31, compared to the drawn down and paid amount which is in each fiscal year ending June 30. The City and the Authority staff require a document/invoice from Easter Hill Development to request the amount of operating subsidy to be drawn down from eLOCCS and paid via wire transfer as a passthrough payment, based on their needs and/or eligible amount set forth by HUD.

Finding SA2020-004: Missing Tenant Documents AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR section 960 requires Public Housing Authorities (PHA) that receive public housing funds to remit payment to eligible tenants and to maintain documentation for the payments through a contract. Condition: We reviewed sixty tenant files for existing and new tenants for FY2020 and noted that the Authority did not maintain all required documentation. Furthermore, approximately 70% of the tenants are missing required forms, and 10 had no related forms and documents for FY2020. We also noted the reflected rent amounts did not align with the rent calculation or reexamination amount. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide such documentation. Effect: The Housing Authority is not in compliance with the payment documentation requirements as stated in 24 CFR section 960. Identification as a repeat finding: Yes, since 2017. Recommendation: The Housing Authority must develop procedures to ensure that all required documentation for public housing tenants is properly maintained. Management Response: As part of ongoing efforts to strengthen file integrity and compliance standards, the Authority has implemented the following measures: Standardized File Checklist: A comprehensive checklist has been developed and is included in all resident files. This tool is designed to ensure that all required documentation is accounted for and consistently organized. Dedicated File Oversight Personnel: The Authority has hired designated staff responsible for the oversight, organization, and quality control of file documentation. These individuals will ensure ongoing compliance with HUD regulations and internal standards, as well as support audit readiness. Income Certification Systemization: All income calculations for resident certifications are now completed and documented exclusively within the Property Management system, Yardi One. This centralizes data processing, improves accuracy, and ensures a reliable audit trail for all income determinations.

Finding SA2020-005: Lack of Documented Suspension and Debarment Verification for Vendors AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR parts 180 required non-federal entities including Public Housing Authorities (PHA) must verify that vendors and contractors are not suspended or debarred prior to entering into a contract. Condition: During our audit, we noted four vendors have no documentation to proof that vendors were not suspended or debated. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide the supporting documents. Effect: The Housing Authority is not compliance with the suspension and debarment requirements as stated in 24 CFR part 180. Recommendation: The Housing Authority should retain documentation that vendors are not suspended or debarred prior to awarding federally funded contracts. Management Response: The Authority understands and accepts the recommendation that documentation of vendor suspension or debarment status must be retained. The Authority staff has followed the City’s process in verifying this information, but there was no proof retained. It has been inquired on the sufficient requirement and the understanding is that a screenshot will suffice. Staff will proceed with retaining a screenshot of vendor verification.

Finding SA2020-006: Lack of documentations for Declaration of Trust (DOT) and Declaration of Restrictive Covenants (DORC) AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR section 905 required non-federal entities including Public Housing Authorities (PHA) are required to maintain current or valid DOT or DORC recorded against all public housing properties that have received funding under the U.S. Housing Act of 1937. Condition: During our audit, we noted the DOTs provided for certain housing properties are outdated and didn’t reflect subsequent modernization improvements. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide the supporting documents. Effect: The Housing Authority is not compliance with the HUD requirements as stated in 24 CFR section 905. Recommendation: The Housing Authority should maintain a list of all owned and insured properties, including land, non-residential facilities, and modernization efforts, and ensure that each property has a current and valid DOT/DORC on record. Management Response: The Authority maintains a comprehensive list of all owned and insured assets within our Asset Repositioning strategy document. In alignment with the recommendation, the Housing Authority will establish an electronic filing system to securely store all declarations of trust. In accordance with PHI Notice 2014-14, the Housing Authority will formally request the release of the Declaration of Trust (DOT) from HUD prior to the closing or transfer of the title of any public housing property.

Finding SA2020-007: Environmental Review AL number: 14.850 and 14.872 AL Title: Public and Indian Housing and Public Housing Capital Fund Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR parts 50 and 58 required non-federal entities including Public Housing Authorities (PHA) must complete environmental reviews for all the operating and capital activities every five years. This review must result in a formal approval signed by a HUD Approving Official, such as Form HUD- 7015.16, Form HUD-4128, or another acceptable format as outlined in PIH Notice 2016-22. Condition: During our audit, we noted no environmental review approval documentation was provided for the Nevin and Hacienda properties for FY2020. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide the supporting documents. Effect: The Housing Authority is not compliance with the environmental review requirements as stated in 24 CFR parts 50 and 58. Recommendation: The Housing Authority should ensure that a current environmental review is completed for all applicable properties and retain the related documentation properly. Management Response: On May 6, 2025, the Authority Board of Commissioners passed a resolution to authorize a contract for conducting a physical needs assessment of Nystrom Village and Richmond Village. This assessment aims to identify repair, maintenance, and capital improvement activities for future environmental reviews.

Finding SA2020-008: Capital Funds for Operating Costs AL number: 14.872 AL Title: Public Housing Capital Fund Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2020) Criteria: 24 CFR section 905 required Public Housing Authorities (PHA) transferred capital funds to operations under BLI 1406 are not considered obligated until the PHA has both budgeted and drawn down the funds. Funds must be budgeted under BLI 1406 (Operations), and a voucher request must be submitted in LOCCS. The amount reported in LOCCS must match the amount recorded in the PHA's accounting system. Condition: During our audit, we noted Authority recorded capital fund transfer in its general ledger that didn’t align with the LOCCS. Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide properly explanation. Effect: The Housing Authority is not compliance with the requirements as stated in 24 CFR section 905. Recommendation: The Housing Authority should ensure that all obligations of Capital Funds for operations (BLI 1406) are recorded in its accounting system based on the actual voucher request in LOCCS. Staff should be trained and keep track of the requirements align with the compliance. Management Response: The Authority understands and accepts the recommendation to retain documentation for Capital Fund drawdowns. The City and Authority staff have implemented a process of providing a form that is reviewed and approved by the Authority Director before drawdowns are processed in eLOCCS. This process also ensures the separation of duties of funding requests, cash handling, and reporting.

Finding SA2019-001: Rent Reasonableness Determination AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR Section 982.507 requires Public Housing Authorities (PHA) that receive Section 8 housing choice vouchers to determine whether the rent paid to the owner is a reasonable rent in comparison to rent for other comparable unassisted units by considering the location, quality, size, unit type and age of the contract unit. The PHA is required to maintain records to document the basis for the determination that rent to owner is a reasonable rent. Condition: We reviewed sixty Section 8 tenant files for new and existing tenants, and noted six instances in which there were no rent reasonableness certificates to support the respective rent increases in fiscal year 2019 or certificates to support rent over the last three years. Furthermore, we noted one instance in which the tenant’s rental assistance was above the amount determined reasonable through the rent reasonableness determination, however, the Housing Authority did not modify the tenant’s payment accordingly. Effect: The Housing Authority is not in compliance with the requirements as stated in 24 CFR Section 982.507. Cause: We understand the missing certificates and unreasonable rent was due to staff turnover and lack of oversight in the Housing Authority during fiscal year 2019. Identification as a repeat finding: Yes. Since fiscal year 2017. Recommendation: The Housing Authority must develop procedures to ensure required documentation is properly maintained for all tenant files. In addition, any unreasonable rent should be adjusted accordingly. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-002: Missing Utility Allowance Forms AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR Section 982.517 requires Public Housing Authorities (PHA) maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised. Condition: We examined sixty Section 8 tenant files for new and existing tenants, and noted three instances in which there were no utility allowance schedule included in the tenant’s file for fiscal year 2019. Effect: The Housing Authority is not in compliance with the requirements as stated in 24 CFR Section 982.517. Cause: It was noted the missing allowance schedules were due to staff oversight. Identification as a repeat finding: Yes. Since fiscal year 2017. Recommendation: The Housing Authority must develop procedures to ensure required documentation is properly maintained for all tenant files. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-003: Annual Housing Quality Standards Inspections AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR Sections 982.158(d) and 982.405(b) requires Public Housing Authorities (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. For inspections that fail the standards, the PHA is required to complete a follow up inspection with the tenants within 24 hours for life-threatening deficiencies and within 30 days for non- life-threatening deficiencies. Condition: We reviewed sixty Section 8 tenant files for new and existing tenants and noted the following: • Five instances in which an HQS Inspection checklist was not included in the tenants’ files. • One instance in which an HQS inspection checklist was in process, however, there was no inspection date or sign off indicating whether inspection was completed. • One instance in which there was a failed inspection for the tenant, however, there was no documentation of a reinspection. • Three instances in which the tenant had a failed inspection and a reinspection with an additional fail, and there was no documentation indicating follow up by the Housing Authority. We also reviewed forty HQS inspections that had failed inspections during fiscal year 2019 and noted the following: • Eight instances in which the tenant failed the inspection and did not receive a grade of pass until well over the 30 day required timeframe. • Three instances in which the failed inspection was due to a life threatening deficiency which must be corrected within 24 hours. However, the tenants were not reinspected from 30 days to more than 30 days until after the deficiencies were noted. • Eight instances in which there was a failed inspection for the unit, however, the Housing Authority did not follow up to re-inspect the unit. • One instance in which the tenant failed the original inspection and re-inspection. However, the Housing Authority did not follow up with the tenant until a year after. • One instance in which the tenant failed the original inspection and re-inspection, however, the Housing Authority never followed up with the tenant. Effect: The Housing Authority is not in compliance with the requirements as stated in 24 CFR Section 982.517(d) and 982.405(b). Cause: It was noted the missing checklists were due to staff oversight. Identification as a repeat finding: Yes. Since fiscal 2017 and in 2018. Recommendation: The Housing Authority must develop procedures to ensure required documentation is properly maintained for all tenant files. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-004: Incomplete Tenant Files – Income Reexamination AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: Public Housing Authorities (PHA) are required to maintain up to date files for all new and existing tenants. Files should include all required forms and documentation as stipulated in 24 CFR Section 982. Condition: We reviewed sixty Section 8 tenant files for new and existing tenants, and noted six instances in which the income reexamination form for fiscal year 2019 was missing from the tenant’s file. Effect: The Authority is not in compliance with the requirements as stated in 24 CFR Section 982. Cause: It was noted the missing forms were due to staff oversight. Identification as a repeat finding: Yes. Since fiscal 2017. Recommendation: The Housing Authority must develop procedures to ensure required documentation is properly maintained for all tenant files. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-005: Timeliness and Accuracy of Voucher Payments AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR part 982 requires that monthly housing assistance payments on behalf of tenants to landlords be made in accordance with the tenants’ Housing Assistance Payment (HAP) contract for the Section 8 Housing Choice Vouchers (HCV) program. Payments made should be processed in a timely manner, usually at the beginning of each month and the payments should be made in the correct amount each month in accordance with the HAP contracts for the tenants. Condition: We tested sixty HCV tenants’ HAPs made to landlords in June 2019 and noted the following: o Twelve tenants that did not have HAP contract documentation indicating the amount of the HAP contract to support the payments made, that totaled $15,374 for the twelve tenants selected for testing. o One tenant was paid in the amount of $1,820. However, the payment should have been made in the amount of $1,391. o One tenant was paid in the amount of $1,525. However, the payment should have been made in the amount of $1,549. o One tenant was paid in the amount of $1,342. However, the Housing Authority indicated that the tenant was deceased and should not have received rent that month. o Six tenant files could not be located as noted in finding SA 2019-006. HAP payments to three of the tenants totaled $4,183. No HAP payments were made to the other three tenants and the Authority was not able to explain why. Effect: When HAPs are not paid timely or correctly, the Authority runs the risk of unpaid contracts and the Authority is not in compliance with the housing payment requirements for the HCV program. Cause: The above condition was caused by staff turnover and management oversight. Identification as a repeat finding: Yes. Since fiscal 2017. Questioned Costs: We question all costs noted above in the total amount of $21,328. Recommendation: The Authority must develop procedures to ensure that payments are made timely and accurately in accordance with grant requirements. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Authority.

Finding SA2019-006: Missing Tenant Files AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: Public Housing Authorities (PHA) are required to maintain up to date files for all new and existing tenants. Files should include all required forms and documentation as stipulated in 24 CFR Section 982. Condition: During our active tenant testing, we noted six tenants of which the Housing Authority did not have any tenant files for the tenants. Therefore, we were unable to verify that the tenants exist or were paid in the proper amounts. Effect: The Housing Authority is not in compliance with the requirements as stated in 24 CFR Section 982. Cause: We understand the missing files were due to oversight by the Housing Authority during the transition of the Housing Authority files to the County in 2019. Questioned Costs: Questioned costs are identified for these files as a part of finding SA 2019-005. Identification as a repeat finding: Yes, Since fiscal 2017. Recommendation: The Housing Authority must develop procedures to ensure files exist for all tenants. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-007: Required Reporting AL number: 14.871 AL Title: Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: Public Housing Authorities (PHA) are required to file and complete Form HUD-52648, SEMAP Certification – Addendum for Reporting Data for Deconcentration Bonus Indictor as stipulated in 24 CFR Section 985 each fiscal year. Condition: We noted that the Housing Authority did not file the required Form HUD-52648 during fiscal year 2019. Effect: The Housing Authority is not in compliance with the reporting requirements as stated in 24 CFR Section 985. Cause: We understand the report was not filed due to oversight by the Housing Authority during the transition of the Housing Authority program to the County in 2019. Recommendation: The Housing Authority must develop procedures to ensure all required reports are filed for the program. Since the Housing Authority transferred the Housing Choice Vouchers (HCV Section 8) program to the Housing Authority of the County of Contra Costa (HACCC) on July 1, 2019, the Housing Authority should work with the HACCC to determine how to address the recommendation. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-008: Internal Controls AL number: 14.850 and 14.871 AL Title: Public and Indian Housing, and Housing Voucher Cluster - Section 8 Housing Choice Vouchers Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: Public Housing Authorities (PHA) are required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Condition: During our audit, we were unable to obtain an understanding of the internal controls over the federal awards of the Authority, because current Authority staff could not respond to our inquiries about processes and procedures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2019 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide any information regarding the internal controls of the Authority. Effect: The Housing Authority is not in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award as stated in CFR 200.303. Recommendation: The Housing Authority must develop procedures to ensure that there is an internal control environment in compliance with the federal requirements. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-009: Operating Subsidy Payments Supporting Documentation AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR section 990 requires Public Housing Authorities (PHA) to provide operating subsidies to public housing projects and document the specific calculation requirements through HUD Form 52723. Condition: During our audit, we were unable to obtain sufficient documentation for additional operating subsidy payments made to Easter Hill for Richmond Village I, II, and III in the amount of $179,806 made in fiscal year 2019 that staff indicated were for payments that should have been made in fiscal year 2018. Furthermore, the payments in the amount of $179,806 were not supported by the HUD Form 52723 and therefore, we were unable to determine if the subsidy payments were properly calculated in accordance with 24 CFR 990. Cause: Due to staffing shortage, operating subsidy payments were delayed for a period and then paid in a lump sum without attaching detailed supporting documents. Effect: The Housing Authority is not in compliance with the specific calculation requirements of HUD Form 52723 as specified in 24 CFR section 990. Questioned Costs: We question the costs in the amount of $179,806 noted above. Recommendation: The Housing Authority must develop procedures to ensure that all operating subsidy payments made are supported by HUD Form 52723 and in accordance with 24 CFR section 990. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-010: Waiting List Documentation AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR section 960 requires Public Housing Authorities (PHA) to maintain waiting lists for public housing. Furthermore, all payments made to tenants should be supported by contracts and proof of payment to the tenants. Condition: During our audit, the Housing Authority was unable to provide us with a waiting list for the public housing program and therefore, we were unable to verify that the Authority was adhering to the waiting list requirements as outlined in 24 CFR section 960. Cause: We understand that the staff overseeing the federal awards during fiscal year 2019 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide such documentation. Effect: The Housing Authority is not in compliance with the waiting list documentation requirements under 24 CFR section 960. Recommendation: The Housing Authority must develop procedures to ensure that waiting list documentation is maintained in accordance with 24 CFR section 960. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

Finding SA2019-011: Missing Tenant Documents AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2019) Criteria: 24 CFR section 960 requires Public Housing Authorities (PHA) that receive public housing funds to remit payment to eligible tenants and to maintain documentation for the payments through a contract. Condition: We reviewed seventeen public housing files for existing tenants for the month of June 2019 and noted that the Authority did not have documentation of payments clearing the Authority’s bank account. Furthermore, we noted one tenant that should have received utility assistance in the amount of $105 under the program, but the Authority did not remit the assistance payment. Cause: We understand that the staff overseeing the federal awards during fiscal year 2019 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide such documentation. Effect: The Housing Authority is not in compliance with the payment documentation requirements as stated in 24 CFR section 960. Recommendation: The Housing Authority must develop procedures to ensure that all public housing assistance provided to eligible tenants is maintained, including proof of payment. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the Housing Authority.

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