EIN: 946002959
UEI: SZEGXHQ2K1W3
Audited by: Macias Gini & O'Connell
Cognizant agency: 14 [Department of Housing and Urban Development]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 30, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 30, 2026 (122 days from today).
What is a management decision? →Finding Reference: 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant 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 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate. Condition From a total population of 17,852 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2025, for each of 60 selected tenants. For four of the tenants examined, the reexaminations were not completed within the required time frame. Cause of Condition The Authority has been working through a backlog of delinquent reexaminations due to challenges with past service providers not meeting contractual commitments to timely perform the reexaminations on behalf of the Authority. The Authority has since changed service providers and is in process of completing the delinquent reexaminations. Effect The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants. Questioned Costs The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined. Identification of Repeat Finding This is a repeat of finding 2024-002 reported for the year ended September 30, 2024 Recommendation The Authority should continue utilizing its enhanced tracking tools and updated procedures to monitor the completion of annual tenant reexaminations and supporting documentation. Management should continue working through the existing backlog of overdue reexaminations, reinforce staff accountability for timely completion and filing of required documents, and maintain ongoing supervisory review to ensure compliance with HUD requirements. Additionally, the Authority should periodically evaluate the effectiveness of its tracking processes and make further refinements, as necessary, to promote timely completion of reexaminations, reduce processing delays, and prevent future backlogs. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant 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 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate. Condition From a total population of 17,852 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2025, for each of 60 selected tenants. For four of the tenants examined, the reexaminations were not completed within the required time frame. Cause of Condition The Authority has been working through a backlog of delinquent reexaminations due to challenges with past service providers not meeting contractual commitments to timely perform the reexaminations on behalf of the Authority. The Authority has since changed service providers and is in process of completing the delinquent reexaminations. Effect The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants. Questioned Costs The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined. Identification of Repeat Finding This is a repeat of finding 2024-002 reported for the year ended September 30, 2024 Recommendation The Authority should continue utilizing its enhanced tracking tools and updated procedures to monitor the completion of annual tenant reexaminations and supporting documentation. Management should continue working through the existing backlog of overdue reexaminations, reinforce staff accountability for timely completion and filing of required documents, and maintain ongoing supervisory review to ensure compliance with HUD requirements. Additionally, the Authority should periodically evaluate the effectiveness of its tracking processes and make further refinements, as necessary, to promote timely completion of reexaminations, reduce processing delays, and prevent future backlogs. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Cluster Federal Catalog Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Authority’s Response & Actions Taken The Authority has taken substantial and measurable steps to address the prior backlog of annual reexaminations, including stabilizing third-party administration and implementing earlier and more structured reexamination processes. As a result of these efforts, all reexaminations identified during the audit period were ultimately completed, and all households were confirmed eligible with accurate housing assistance payments prior to the end of FY2025. The Authority’s current procedures—such as initiating reexaminations 150 days in advance, conducting weekly monitoring, and coordinating closely with property management and service providers—have significantly improved overall performance and strengthened operational consistency. The remaining instances of untimely reexaminations reflected in the audit are largely attributable to tenant non-responsiveness and timing factors associated with the audit sample period, during which a portion of cases were still in process despite being actively worked on and subsequently completed. These results do not fully reflect the progress achieved or the Authority’s current operational status. The Authority maintains a tenant-centered approach to program administration, ensuring that eligible households are not unnecessarily terminated due to documentation delays (this is especially important with the Authority being in shortfall which does not allow for voucher reinstatements). This approach is supported by structured outreach, enforcement protocols, and documented follow-up actions. The Authority continues to work diligently with its third-party HCV contractors, city department partners, onsite service providers and property management companies to ensure timely recertification of all assisted households. At the same time, the Authority has strengthened internal controls to better align tenant flexibility with HUD timeliness requirements. The Authority continues to enhance oversight, tracking, and contractor accountability to ensure sustained compliance with HUD standards. The enhanced oversight and monitoring resulted in SEMAP fiscal year end 9/30/2025 with High Performer status, and current performance trends show the Authority is well positioned to maintain SEMAP High Performer status for the current fiscal year. Specifically for SEMAP Indicator 9 for Annual Reexamination, the Authority achieved 5 out of 10 points for fiscal year end 9/30/2025, which was an improvement from the prior fiscal year of 0 out of 10 points, and currently trending in a positive direction to achieve 10 out of 10 points for FY2026. The corrective actions outlined below are designed to ensure that tenant-related delays are minimized, documented, and managed in a way that prevents the recurrence of this material weakness. To address this finding and in accordance with the Authority’s Administrative Plan and HUD rules and regulations, the Authority has already implemented the following actions starting fiscal year 2023-24: For the Project-Based program: Two project-based households were cited for late re-exams in relation to finding 2025-001. Prior to this year’s audit, those households were identified and brought into compliance prior to the end of FY2025. In addition to the actions taken in last year’s corrective action plan for finding 2024-002, the Project-Based Voucher Program has begun: Scheduling second notice in-person appointments for households who do not return the Annual Re-examination package in the required timeframe from the first mailing. Maintaining a live shared log of delinquent Annual Re-examinations which the property managers have access to. Including resident services and property management in the intent to terminate process to emphasize the importance of compliance and provide direct support to the resident. Streamlining Annual Re-examinations for senior and/or disabled households with fixed incomes through the triennial process. Scheduling and completing on-site visits for senior-disabled sites and non-restricted sites with large numbers of families out of compliance. Continuing to review discrepancies between the Authority’s System of Record and PIH Information Center, the official database of HUD. For the Tenant-Based Program: Two tenant-based households were cited for late re-exams in relation to finding 2025-001. Prior to the end of FY2025, each household was brought into compliance and had their annual reexaminations completed. In addition to the actions taken in last year’s corrective actions plan for finding 2024-002, the Tenant-Based Program has begun: Updating the administrative plan to allow for verification of documents to be dated with 120- days of submittal instead of 60-days which allows more flexibility and less likelihood of needing additional items from the client. Tracking annual reexaminations for each assigning housing specialist the moment packets are mailed and throughout the process, both through individual tracking sheets and the Authority's Customer Relations Management system. Housing Authority 2025 Corrective Action Plan Page 4 of 6 Tracking late re-exams on the management level on a monthly basis and following up with the individual housing specialists. Utilizing case managers for special programs to assist with outreach and completion of the paperwork. Reviewing previous annual reexamination and HUD’s supplemental 92006 form to determine if the household has identified an individual to contact for assistance with the annual reexam and contacting them. Continuing to review discrepancies between the Authority’s System of Record and PIH Information Center, the official database of HUD. Anticipated Implementation Date September 30, 2026 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
2024-002
Finding Reference: 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the units leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. Condition From a total population of 17,852 tenants for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants and identified seven tenants whose HQS inspections were not completed by the required due dates and prior to the subsidy payments. Cause of Condition The Authority’s inspection scheduling and documentation practices were not consistently applied in a manner that ensured all required HQS inspections were completed by their due dates and that related inspection records were maintained in accordance with HUD requirements. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs The units were ultimately inspected and determined to be compliant with the Housing Quality Standards. Questioned costs were not identified. Identification of Repeat Finding This is a repeat of finding 2024-003 reported for the year ended September 30, 2024. Recommendation The Authority should implement more structured oversight of its HQS inspection workflow to promote timely completion of required inspections and consistent maintenance of inspection records. This may include adopting clearer scheduling protocols, improving monitoring of inspection due dates, and reinforcing expectations for documenting and retaining inspection results in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the units leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. Condition From a total population of 17,852 tenants for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants and identified seven tenants whose HQS inspections were not completed by the required due dates and prior to the subsidy payments. Cause of Condition The Authority’s inspection scheduling and documentation practices were not consistently applied in a manner that ensured all required HQS inspections were completed by their due dates and that related inspection records were maintained in accordance with HUD requirements. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs The units were ultimately inspected and determined to be compliant with the Housing Quality Standards. Questioned costs were not identified. Identification of Repeat Finding This is a repeat of finding 2024-003 reported for the year ended September 30, 2024. Recommendation The Authority should implement more structured oversight of its HQS inspection workflow to promote timely completion of required inspections and consistent maintenance of inspection records. This may include adopting clearer scheduling protocols, improving monitoring of inspection due dates, and reinforcing expectations for documenting and retaining inspection results in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Cluster Federal Catalog Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Authority’s Response & Actions Taken The Authority has made substantial progress in resolving the backlog of Housing Quality Standards (HQS) inspections that originated during the COVID-19 period, when HUD waivers and restricted unit access limited the ability to conduct timely inspections. Since that time, the Authority has reestablished normal inspection operations and significantly improved inspection volume and completion rates. All inspections noted in the audit were completed shortly after the required timeframes, and each unit ultimately passed HQS inspection and met HUD’s requirements for safe, decent, and sanitary housing. These results reflect that there was no impact to housing quality or participant eligibility, but rather timing-related delays within an actively managed inspection pipeline. The instances identified in the audit are largely attributable to timing of the audit sample selection, during which certain inspections were in process and scheduled but had not yet been completed. This does not fully reflect the Authority’s current operational performance or the progress achieved in reducing the inspection backlog. The Authority has established ongoing procedures to prioritize and monitor inspection timeliness, including use of the Emphasys Elite system in coordination with HUD’s PIC system to identify and track units approaching or exceeding inspection deadlines. Units identified as nearing noncompliance are actively scheduled and completed, and the Authority continues to work closely with its third-party HCV contractors to maintain consistent inspection coverage. The Authority continues to enhance oversight, tracking, and contractor accountability to ensure sustained compliance with HUD standards. The enhanced oversight and monitoring resulted in SEMAP fiscal year end 9/30/2025 with High Performer status, and current performance trends show the Authority is well positioned to maintain SEMAP High Performer status for the current fiscal year. Specifically for SEMAP Indicator 12 for Annual HQS Inspections, the Authority achieved 10 out of 10 points for fiscal year end 9/30/2025, which was an improvement from the prior fiscal year of 0 out of 10 points, and currently projected to maintain full points for this indicator with 97% timely annual HQS inspections completed. The key strategies and controls in place are as follows: Tenant-Based Program: Review the report of outstanding HQS Inspections on a weekly basis. Schedule outstanding HQS Inspections in order of aging date. Conduct HQS Inspections prior to the anniversary date of previously completed inspection. Running a monthly report of failed inspections and comparing them with future scheduled inspections to ensure that a second inspection has been scheduled. Running a monthly report to identify units with two failed inspections to ensure all have been abated correctly. Implement weekly monitoring to ensure all units are properly abated and lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without a cure. The Authority has worked with Emphasys to identify the best ways to sort aged HQS inspections due and generate/schedule in bulk, as well as maximize the Inspector’s workday by routing the tenantbased units in a way that flows in a clear and orderly manner. Similar to the handling of delinquent annual reexaminations, the Authority is checking the data in PIC with the system of records and processing 50058 corrections where inspections have been completed but rejected in PIC due to out of sequence effective dates and any other fatal errors that require corrective action. Anticipated Implementation Date September 30, 2026 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
2024-003
FAC accepted this audit on June 30, 2025 — management decision was due December 30, 2025.
Finding Reference: 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant 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 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate. Condition From a total population of 16,907 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2024, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2024 for each of 60 selected tenants. For fifteen of the tenants examined, the Authority was not able to provide documentation demonstrating that a reexamination was completed within the required time frame prior to the tested monthly subsidy payment. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all relevant tenant records and documents are properly completed and filed with within the specified due dates for annual reexamination. Effect The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants. Questioned Costs The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should ensure that it has procedures in place to track and complete future tenant reexaminations within the required time frames. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant 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 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate. Condition From a total population of 16,907 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2024, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2024 for each of 60 selected tenants. For fifteen of the tenants examined, the Authority was not able to provide documentation demonstrating that a reexamination was completed within the required time frame prior to the tested monthly subsidy payment. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all relevant tenant records and documents are properly completed and filed with within the specified due dates for annual reexamination. Effect The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants. Questioned Costs The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should ensure that it has procedures in place to track and complete future tenant reexaminations within the required time frames. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Cluster Federal Catalog Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority’s Response & Actions Taken The Authority has made considerable progress in addressing the backlog of annual re-examinations that resulted from the transition of a third-party contractor to new third-party contractors to administer its Project-Based and Tenant-Based Voucher Programs. The material weakness was further exasperated by tenants not responding to re-examination notices or failing to provide the required income and household documentation by established deadlines. In an effort to avoid unnecessary subsidy terminations and protect vulnerable tenants, the Authority’s administrative plan allows for extended grace periods and repeated follow-ups. While this tenant-centered approach helped mitigate adverse outcomes for families, it also contributed to delays and ultimately resulted in noncompliance with HUD’s timeliness requirements. The Authority recognizes the critical importance of conducting timely and accurate annual reexaminations to maintain program integrity, ensure proper subsidy determination, and remain in compliance with HUD regulations. With that said, the Authority continues to work diligently with its third-party HCV contractors, city department partners, onsite service providers and property management companies to ensure the Authority is timely recertifying all assisted households. Although the Authority has established procedures to initiate reexaminations 150 days in advance of their due dates, a significant portion of the delays cited in the recent audit were the result of tenant non-responsiveness—specifically, the failure to provide required documentation despite multiple notices and outreach efforts. Importantly, all overdue reexaminations identified during the audit were ultimately completed. Each of the affected households was determined to be eligible under HUD guidelines, and housing assistance payments (HAPs) were accurately processed based on verified household information. The Authority remains committed to its tenant-centered mission, which prioritizes preventing unnecessary subsidy terminations and supporting household stability. At the same time, the Authority fully recognizes the importance of complying with HUD’s reexamination timelines. The corrective actions outlined below are designed to ensure that tenant-related delays are minimized, documented, and managed in a way that prevents the recurrence of this material weakness. To address this finding and in accordance with the Authority’s Administrative Plan and HUD rules and regulations, the Authority has already implemented the following actions starting fiscal year 2023-24: • Initiating the Annual Re-examination process 150 days before the required anniversary date to give households more time to comply. • Reviewing the report of outstanding Annual Re-examinations on a weekly basis. • Scheduling additional partner calls with property management and resident services to assist non-compliant families. • Enforcing Annual Reexamination compliance through the Intent to Terminate process • Scheduling and completing on-site visits for senior-disabled sites and non-restricted sites with large numbers of families out of compliance. • Reviewing discrepancies between the Authority’s System of Record and PIH Information Center, the official database of HUD. Per CFR 24 985.3, Section 8 Management Assessment Program (SEMAP) Indicator 9 for Annual Reexamination, 95% of all households must be recertified within 14 months of their last annual recertification to maintain full compliance, and 90% of all households must be recertified within 14 months to maintain partial compliance with the SEMAP Assessment standards required by HUD. The Authority expects to hit 90% by the end of the SEMAP year September 30, 2025. Anticipated Implementation Date September 30, 2025 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
Finding Reference: 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the units leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. Condition From a total population of 16,907 tenants for the fiscal year ended September 30, 2024, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants and identified five tenants whose HQS inspections were not completed within the required due dates prior to the subsidy payments. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections were completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs The units were ultimately inspected and determined to be compliant with the Housing Quality Standards. Questioned costs were not identified. Identification of Repeat Finding This is a repeat of finding 2023-002 reported for the year ended September 30, 2023. Recommendation The Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the units leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. Condition From a total population of 16,907 tenants for the fiscal year ended September 30, 2024, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants and identified five tenants whose HQS inspections were not completed within the required due dates prior to the subsidy payments. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections were completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs The units were ultimately inspected and determined to be compliant with the Housing Quality Standards. Questioned costs were not identified. Identification of Repeat Finding This is a repeat of finding 2023-002 reported for the year ended September 30, 2023. Recommendation The Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Cluster Federal Catalog Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Authority’s Response & Actions Taken The Authority has made considerable progress in addressing the backlog of annual inspections that resulted from restricted unit access and the temporary implementation of HUD waivers during the COVID-19 national pandemic. These necessary public health measures, while appropriate at the time, contributed to delays in fulfilling Housing Quality Standards (HQS) inspection requirements. The Authority acknowledges that additional progress is still needed and remains actively engaged with its third-party Housing Choice Voucher (HCV) contractors to ensure timely completion of all outstanding inspections. The Authority is fully committed to ensuring that all units under contract meet and exceed HUD’s standards for safe, decent, and sanitary housing, in accordance with HQS and the Authority’s Administrative Plan. All five annual inspections with exceptions noted during the audit were inspected after the required timeframes and ultimately passed inspection with the units determined to be in full compliance with HUD requirements. The Authority uses the Emphasys Elite software to check against HUD's PIH Information Center (PIC) system to identify units with outstanding Housing Quality Standards (HQS) Inspections. The Authority has scheduled HQS Inspections for the units identified to be out of compliance. Key strategies and controls in place are as follows: Project-Based Program: For the PBV program, the Authority has already implemented the following procedures to result in timely HQS inspections of all units. 1. Matching data between the Emphasys Elite system of records to ensure the most overdue inspections are scheduled. 2. A bulk inspection process was implemented effective November 1, 2024. Through this process, all units for a particular PBV site are scheduled for their annual inspections in the same month each year. This ensures that all units are inspected annually. The scheduling process includes: a. Posting the bulk inspection schedule on the website. This is an annual schedule which identifies properties, property management, and the month the project will be inspected. b. Providing notice to the applicable site owner/manager of the inspection date and the units to be inspected. The notice will include information on how to prepare for the inspection, a request to have site staff accompany the inspector, and a reminder to notify residents so access can be gained even if no one is home. c. Sending individual inspection notices to the owner and participant for each scheduled inspection. For the PBV portfolio, staff will work directly with property management and developers to ensure access to units is continuously granted. Upcoming bulk inspections are also discussed on calls with owners. This allows for increased planning and respect for noticing timelines. Tenant-Based Program: • Review the report of outstanding HQS Inspections on a weekly basis. • Schedule outstanding HQS Inspections in order of aging date. • Conduct HQS Inspections prior to the anniversary date of previously completed inspection. • Running a monthly report of failed inspections and comparing them with future scheduled inspections to ensure that a second inspection has been scheduled. • Running a monthly report to identify units with two failed inspections to ensure all have been abated correctly. • Implement weekly monitoring to ensure all units are properly abated and lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without a cure. The Authority has worked with Emphasys to identify the best ways to sort aged HQS inspections due and generate/schedule in bulk, as well as maximize the Inspector’s workday by routing the tenantbased units in a way that flows in a clear and orderly manner. Similar to the handling of delinquent annual reexaminations, the Authority is checking the data in PIC with the system of records and processing 50058 corrections where inspections have been completed but rejected in PIC due to out of sequence effective dates and any other fatal errors that require corrective action. The procedures for the project-based and tenant-based programs are already in effect, and the backlog of inspections has been substantially reduced as illustrated by a reporting rate of 99% for SEMAP Indicator 12 annual HQS inspections as of May 31, 2025. Monthly performance reports are also reviewed by management to ensure inspection timeliness is maintained. Anticipated Implementation Date September 30, 2025 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
2023-002
Finding Reference: 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 5,989 tenants with failed inspections during the fiscal year, we identified eight cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe and was not able to provide evidence showing that a PHA approved extension was granted. Cause of Condition The Authority did not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality or may be incorrectly withholding HAPs to landlords who have properly corrected deficiencies within the required timeframes. Questioned Costs The Authority was able to provide documentation showing that the units were inspected after the required time frames and ultimately passed inspection. Therefore, questioned costs were not identified in connection with the units examined. Identification of Repeat Finding This is a repeat of finding 2023-003 reported for the year ended September 30, 2024. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement to ensure that follow ups on failed inspections are performed timely. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 5,989 tenants with failed inspections during the fiscal year, we identified eight cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe and was not able to provide evidence showing that a PHA approved extension was granted. Cause of Condition The Authority did not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality or may be incorrectly withholding HAPs to landlords who have properly corrected deficiencies within the required timeframes. Questioned Costs The Authority was able to provide documentation showing that the units were inspected after the required time frames and ultimately passed inspection. Therefore, questioned costs were not identified in connection with the units examined. Identification of Repeat Finding This is a repeat of finding 2023-003 reported for the year ended September 30, 2024. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement to ensure that follow ups on failed inspections are performed timely. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions – HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Authority’s Response & Actions Taken The Authority has made considerable progress in addressing the backlog of annual Housing Quality Standards (HQS) inspections and enforcement since transitioning the programmatic functions of the Housing Choice Voucher (HCV) program to third-party contractors. While significant strides have been made, the Authority acknowledges that further progress is necessary and remains actively engaged with its third-party HCV contractors to ensure that all HCV-assisted units meet and consistently maintain HUD’s HQS requirements. The Authority remains committed to ensuring that all units under contract are not only compliant but provide safe, sanitary, and decent housing in accordance with HQS regulations and the Authority’s Administrative Plan. The discrepancies noted in the audit were primarily due to inconsistencies in the application of enforcement timelines and insufficient documentation related to landlord extension requests and their corresponding approvals. Importantly, all delayed follow-up inspections identified during the audit were successfully completed outside the required timeframes. Each unit passed inspection and was found to be compliant with HUD HQS standards. Housing assistance payments (HAP) were accurately processed for these units, and no abatements were necessary. The Authority continues to refine its inspection protocols, improve documentation practices, and reinforce contractor accountability to ensure timely and compliant HQS inspections across the entire HCV portfolio. The Authority uses the Emphasys Elite software to schedule, record, and enforce HQS inspections. The Authority also uses its Customer Relations Management (CRM) system to track units that have failed an HQS inspection. To prevent recurrence, the Authority has already implemented the following corrective steps: • Daily review process of units that have failed and/or no-showed two or more consecutive inspections. The inspection department uses this process to accurately review the letter generation and notification process for HQS deficiencies and notices of abatement. The inspection department manually reviews and generates both letters to their respective parties (landlord/owner and tenant). • In addition to the daily morning review, at the close of business the HCV contractor will review the failed emergency inspections and will schedule any emergency re-inspections to ensure compliance with HQS enforcement rules and regulations. The Authority’s corrective steps outlined above will significantly strengthen its compliance efforts, reduce risk, and enhance the overall quality and integrity of the HCV program. Anticipated Implementation Date September 30, 2025 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
2023-003
FAC accepted this audit on June 28, 2024 — management decision was due December 28, 2024.
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Cluster Federal Catalog Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance The Authority has made considerable progress in addressing the backlog of annual inspections that resulted from the implementation of HUD waivers during the national pandemic. The Authority acknowledges that more progress in this area is required and continues to work diligently with its third-party HCV contractors to ensure completion of this ongoing work. The Authority understands the importance of and is committed to ensuring all units under contract are beyond safe, sanitary, and decent in accordance with HQS requirements and the Authority's Administrative Plan. The Authority uses the Emphasys Elite software to check against HUD's PIH Information Center (PIC) system to identify units with outstanding Housing Quality Standards (HQS) Inspections. The Authority has scheduled HQS Inspections for the units identified to be out of compliance. Some key strategies and controls in place are as follows: Review the report of outstanding HQS Inspections on a weekly basis. Schedule outstanding HQS Inspections in order of aging date. Conduct HQS Inspections prior to anniversary date of previously completed inspection. Run a monthly report of failed inspections and compare them with future scheduled inspections to ensure that a second inspection has been scheduled. Run a monthly report to identify units with two failed inspections to ensure all have been abated correctly. Implement weekly monitoring to ensure all units are properly abated and lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without a cure. During the pandemic, units were not inspected and legally permitted based upon available HUD regulations. As a result, the Authority has implemented a 100% Annual Inspection requirement for all contracted project-based vouchers (PBVs) and tenant-based vouchers (TBVs) units starting with the 10/1/2023 HUD Section Eight Management Assessment Program (SEMAP) Year. To that end, the HCV contractors have implemented a daily review process for all failed inspections to ensure timely rescheduling and will accurately note inspection extension requests exceeding the 30-day HQS enforcement requirement to bring a unit up to standard. Anticipated Implementation Date September 30, 2024 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
2022-003
Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance The Authority has made significant progress in addressing the backlog of annual inspections since outsourcing the programmatic functions of the HCV program to third-party contractors. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractors to ensure this occurs. The Authority uses the Emphasys Elite software to schedule, record, and enforce HQS inspections. The Authority also uses its Customer Relations Management (CRM) system to track units that have failed an HQS inspection. The HCV contractors have implemented a daily review process of units that have failed and/or no-showed two or more consecutive inspections. The inspection department will use this process to accurately review the letter generation and notification process for HQS deficiencies and notices of abatement. The inspection department will manually review and generate both letters to their respective parties (landlord/owner and tenant). In addition to the daily morning review, at the close of business day, the HCV contractors will review the emergency failed inspections and will schedule any emergency re-inspections to ensure compliance with HQS enforcement rules and regulations. Anticipated Implementation Date September 30, 2024 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractors Kendra Crawford, Director of Housing Operations
FAC accepted this audit on July 30, 2023 — management decision was due January 30, 2024.
Finding Reference: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Admissions and Continued Occupancy Policy dated October 6, 2021, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 960.257 also requires policies and internal controls be in place and complete and accurate tenant records to ensure compliance with HUD requirements. Condition We tested a statistically valid sample of one month for each of 59 participants selected from a population of 938 program participants who received public housing at the beginning of the fiscal year ended September 30, 2022. Identified issues are listed below: 1. For 12 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 12 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2021-002 reported in the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan
Show full finding ▾Hide full finding ▴Finding Reference: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Admissions and Continued Occupancy Policy dated October 6, 2021, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 960.257 also requires policies and internal controls be in place and complete and accurate tenant records to ensure compliance with HUD requirements. Condition We tested a statistically valid sample of one month for each of 59 participants selected from a population of 938 program participants who received public housing at the beginning of the fiscal year ended September 30, 2022. Identified issues are listed below: 1. For 12 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 12 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2021-002 reported in the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan
Reference Number: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken No corrective action is required for this finding because the Authority?s Sunnydale-Velasco, Potrero Annex and Terrace public housing properties, all part of HOPE SF initiative, have been transferred out of the Low Rent Public Housing Program (LRPH). In 2020, the Authority began the accelerated conversion project (HQS conversion), a major undertaking to transform existing public housing sites owned by the Authority, Sunnydale-Velasco (Sunnydale) and Potrero Hill ? including Potrero Annex and Terrace. The conversion transferred the ownership of the public housing units to SFHA Housing Corporation, a blended component unit. To comply with guidelines from the U.S. Department of Housing and Urban Development (HUD), the public housing department has reviewed and updated the tenant files for each phase of the HQS conversion to ensure completeness and accuracy and compliance of the documents with the HCV program for intake requirements. The Authority has completed the accelerated conversion and the transition of the public housing tenant files to the HCV program on September 30, 2022. The public housing units were brought up to Section 8 physical standards (Housing Quality Standards, HQS) and assigned Project-Based Vouchers (PBV) Housing Assistance Payments (HAP) contracts through the Housing Choice Voucher (HCV) program. SFHA Housing Corporation will operate the properties as Project-Based Section 8, until the time that the units will be disposed to the developers for redevelopment, pursuant to their redevelopment schedule and agreement. Anticipated Implementation Date September 30, 2022 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action Kendra Crawford, Director of Housing Operations
2021-002
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has made considerable progress in addressing the backlog of annual inspections. Since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor to ensure this occurs. The Authority will continue to reinforce its current oversight process to ensure HQS inspections are performed in accordance with HUD requirements. The Authority adopted a series of HUD waivers following the COVID-19 pandemic, one of which HQS-5, under Notice PIH 2021-14, allowing the Authority to waive the completion of HQS Inspections through December 31, 2021. The Authority resumed the completion of HQS Inspections and was required by HUD to complete all delayed inspections by December 31, 2022. During fiscal year 2022, the Authority had inspections not completed in a timely manner, however, was not out of compliance as waivers were in place. The Authority is committed to ensuring all units under contract are beyond safe, sanitary, and decent in accordance with HQS requirements and the Authority's Administrative Plan. The Authority uses the Emphasys Elite software to check against HUD's PIH Information Center (PIC) system to identify units with outstanding Housing Quality Standards (HQS) Inspections. The Authority has scheduled HQS Inspections for the units identified to be out of compliance. Some key strategies and controls in place are as follows: ? Review the report of outstanding HQS Inspections on a weekly basis. ? Schedule outstanding HQS Inspections in order of aging date. ? Conduct HQS Inspections prior to anniversary date of previously completed inspection. ? Running a monthly report of failed inspections and comparing them with future scheduled inspections to ensure a timely scheduling of the second inspection. ? Running a monthly report to identify units with two failed inspections to ensure all have been abated correctly. ? Implement weekly monitoring to ensure all units are properly abated and lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without a cure. The Authority will continue to execute these sound procedures to prevent further findings related to inspections. The Authority has implemented a robust internal audit program starting fiscal year 2021- 22 and will continue to select annually a statistically significant random sample of actions completed by the HCV contractor to ensure that all actions are in compliance and files contain all required documentation. Although the HCV program subscribes to a quality control process, the Authority's internal audit program provides a method to reasonably understand the condition of the program as the Authority fully understands its responsibility to ensure the program complies to all applicable laws and regulations governing HCV operations. The HCV program is a part of our continuous monitoring process. Anticipated Implementation Date September 30, 2023 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Kendra Crawford, Director of Housing Operations
Finding Reference: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Assistance Listing Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allowed public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Condition During our audit we selected a statistically valid sample of 17 participants out of a total population of 77 active program participants and identified 1 participant for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due date. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. The requirement to perform inspections that were postponed from prior years and those that became due in the current year resulted in additional constraints to staffing resources. Effect Housing Assistance Payments (HAPs) may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $9,216 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 17 participants that totaled $155,483 in HAPs to the total HAPs of $706,873 for the year, results in likely questioned costs of $41,899. Identification of Repeat Finding This is a repeat of finding 2021-001 reported for the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Assistance Listing Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allowed public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Condition During our audit we selected a statistically valid sample of 17 participants out of a total population of 77 active program participants and identified 1 participant for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due date. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. The requirement to perform inspections that were postponed from prior years and those that became due in the current year resulted in additional constraints to staffing resources. Effect Housing Assistance Payments (HAPs) may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $9,216 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 17 participants that totaled $155,483 in HAPs to the total HAPs of $706,873 for the year, results in likely questioned costs of $41,899. Identification of Repeat Finding This is a repeat of finding 2021-001 reported for the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Federal Catalog Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Inspections Classification of Finding: Significant Deficiency in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual inspections since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority remains committed to proactively making substantial movement toward 100% completion of unit inspections by working diligently with its HCV contractor to ensure this occurs. With that said, the Authority maintains that this finding and questioned costs do not consider the three scheduled inspections of the unit in question, between March and August 2022, that all resulted in cancellation or no-show. The auditors refused to take in consideration the evidence of the repeat scheduled inspection dates for this unit and the ?No Show? results. Notwithstanding the fact that in May 2023, the Authority completed the HQS inspection, and the unit passed. This is acceptable documentation which further evidence that the owner did meet its obligations to maintain the unit in decent, safe, and sanitary condition during the audit period. In alignment with the Authority?s HCV administrative plan, both the family and owner are to be provided reasonable notice for all inspections, at least 24 hours prior. The family must allow the Authority to inspect the unit at reasonable times with reasonable notice (24 CFR 982.51 (d)). When a family occupies the unit at the time of inspection, an adult family member must be present for the inspection. If the family misses two scheduled inspections without the Authority?s approval, the Authority will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family?s assistance in accordance with the termination procedures in the HCV administrative plan. If the family?s assistance is to be terminated, the Authority must notify the owner of its intent to terminate the family?s program assistance so the owner can begin eviction procedures. The Authority is obligated to continue to pay the owner until the eviction is completed. Therefore, the potential effect and questionable costs assumed by the auditor are not applicable when the HQS deficiency is due to the tenant?s failure to meet family obligations. The California?s statewide Declaration of Emergency and the City and County of San Francisco?s proclamation of Local Emergency due to COVID-19 was also still in effect during fiscal year 2021-22. The impact COVID-19 pandemic had on housing stability and mental health has been devastating, and disproportionately affected the most vulnerable populations in San Francisco. California State and the City both implemented an eviction moratorium as a mitigating strategy to ensure housing stability. The Authority also made it a priority to ensure health, safety and housing stability of its residents comprised of some of the most vulnerable populations in San Francisco. To that effect, the Authority collaborated closely with landlords and service providers to assess tenants needs and provided needed assistance throughout the COVID-19 emergency period (i.e., processing interims to assist renters experiencing financial hardship, ensuring food security, and delivering personal protective equipment). Anticipated Implementation Date September 30, 2023 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Kendra Crawford, Director of Housing Operations
2021-001
FAC accepted this audit on June 29, 2022 — management decision was due December 29, 2022.
Finding Reference: 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allows public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 63 participants out of a total population of 5,140 active program participants and identified 23 participants for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due dates. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. Procedural changes due to the global pandemic and staffing constraints led to delayed inspections. Effect HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $227,084 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 63 participants that totaled $913,581 in HAPs to total HAPs of $1,526,746 for the year, the likely questioned costs were $379,495. Identification of Repeat Finding This is a repeat of finding 2020-004 reported for the year ended September 30, 2020. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allows public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 63 participants out of a total population of 5,140 active program participants and identified 23 participants for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due dates. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. Procedural changes due to the global pandemic and staffing constraints led to delayed inspections. Effect HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $227,084 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 63 participants that totaled $913,581 in HAPs to total HAPs of $1,526,746 for the year, the likely questioned costs were $379,495. Identification of Repeat Finding This is a repeat of finding 2020-004 reported for the year ended September 30, 2020. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
The Authority maintains that these findings and questioned costs do not consider the challenges that the agency faced because of the COVID-19 pandemic, which commenced in March of 2020. During this pandemic, both the state and San Francisco were mandated to shelter in place. The Authority acknowledges it is the professional responsibility of the auditor to document and report these exceptions because neither the state nor the City and County of San Francisco have the latitude to override HUD Federal requirements as it relates to the Authority. State and Local Actions: On March 4, 2020, Governor Newsom proclaimed a State of Emergency due to COVID-19. Subsequently, on March 16, 2020, Mayor London N. Breed issued a stay-at-home order for the City and County of San Francisco. These orders prohibited residents from San Francisco from leaving their homes without explicit permission and violations of the orders were considered a misdemeanor that was punishable by a fine or incarceration. Three days later, Governor Newsom issued Executive Order N-33-20, widely referred to as the state of California?s stay-at-home order. Federal Actions: On March 27, 2020, the Federal government enacted into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act contained a provision for waivers, which HUD implemented by the publication of PIH Notice 2020-05 on April 10, 2020. This exempted public housing agencies from the annual inspection requirement for most HUD programs. Because of the waivers and the state and local stay-at-home orders, the Authority ceased conducting annual inspections in March of 2020. Although HUD did not publish waivers for the Moderate Rehabilitation program until five months later or on August 26, 2020, with PIH Notice 2020-20, the agency should not be penalized for adhering to the shelter-in-place orders that sought to protect the clients and its staff. According to PIH Notice 2020-20: ??conducting physical inspections of units in many communities during the COVID-19 pandemic poses its own health risks for families, participating owners, and PHA personnel, and may run counter to public health orders, directives, or recommendations such as shelter in-place or other social distancing practices designed to contain and reduce exposure to COVID-19.? The Authority maintains that these findings are not appropriate given that it was unsafe to conduct physical inspections as described by PIH Notice 2020-20, and the requirement to comply to the State and local stay at home mandates. The audit finding includes, 10 audit samples for HQS unit inspections that occurred within the audit period but did not receive the required prior year annual inspection. The Authority resumed unit inspections during the latter half of November 2020 and ceased this work in December 2020 because of a new shelter in place order due to a rise in COVID cases. Despite the Authority?s good faith effort to mitigate the prior year backlog, which was cited in previous audits, the pandemic has adversely impeded its ability to complete this work as intended. However, for the 10 audit samples noted, the agency conducted the required annual HQS inspection for the current fiscal year. Anticipated Implementation Date September 30, 2023 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor The Authority?s Office of Program Excellence
2020-004
Finding Reference: 2021-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Proposed Admissions and Continued Occupancy Policy dated October 1, 2019, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition We tested a statistically valid sample of one month for each of 60 participants selected from a population of 1,103 program participants who received public housing during the fiscal year ended September 30, 2021. Identified issues are listed below: 1. For 25 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 16 participants, the Authority was not able to provide documentation of management?s review and approval of interim or annual eligibility redeterminations. 3. For 5 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2020-005 reported in the year ended September 30, 2020. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2021-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Proposed Admissions and Continued Occupancy Policy dated October 1, 2019, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition We tested a statistically valid sample of one month for each of 60 participants selected from a population of 1,103 program participants who received public housing during the fiscal year ended September 30, 2021. Identified issues are listed below: 1. For 25 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 16 participants, the Authority was not able to provide documentation of management?s review and approval of interim or annual eligibility redeterminations. 3. For 5 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2020-005 reported in the year ended September 30, 2020. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
The Authority has developed procedures, systems, and controls to ensure compliance with tenant eligibility requirements, income calculations, and third-party verifications, and will revisit these procedures regularly. To cure the U.S. Department of Housing and Urban Development (HUD), default of 2019, in 2020, the Authority began the mandated accelerated conversion project (HQS conversion), a major undertaking to transform existing public housing sites owned by the Authority, Sunnydale-Velasco (Sunnydale) and Potrero Hill ? including Potrero Annex and Terrace. The planned conversion transfers current public housing units in four phases to a private management company, all of which will be assigned Project-Based Vouchers through the Housing Choice Voucher (HCV) program. To comply with guidelines from HUD, the public housing department has been reviewing and updating the tenant files for each phase of the HQS conversion to ensure completeness and accuracy and compliance of the documents with the HCV program for intake requirements. The Authority will complete the accelerated conversion and complete the transition of the public housing tenant files to the HCV program by September 30, 2022. The Authority completed its first internal audit of the Public Housing department at the beginning of the fiscal year 2021-22, by auditing a random sample of 36 actions completed by the public housing department. The objective of the audit ensured that all actions were completed appropriately and that files contained all required documentation. As a result, the authority issued 5 recommendations for the Public Housing department to improve performance and compliance. These recommendations were accessed, and controls based on the findings were implemented for subsequent phases of the Authority?s accelerated conversion. Anticipated Implementation Date December 30, 2022 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action Kendra Crawford, Director of Housing Operations
2020-005
Finding Reference: 2021-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 312 tenants with failed inspections during the fiscal year, we identified 4 cases in a statistically valid sample of 62 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $31,358, which represents housing assistance payments (HAPs) made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is a repeat of finding number 2020-003 reported in the year ended September 30, 2020. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2021-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 312 tenants with failed inspections during the fiscal year, we identified 4 cases in a statistically valid sample of 62 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $31,358, which represents housing assistance payments (HAPs) made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is a repeat of finding number 2020-003 reported in the year ended September 30, 2020. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
The Authority has made significant progress in addressing the backlog of annual recertifications and inspections since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor to ensure this occurs. The Authority will reinforce its current oversight process to ensure failed inspections are addressed in accordance with HUD requirements. Some key strategies and controls include: ? Running a monthly report of failed inspections and comparing with future scheduled inspections to ensure that a second inspection has been scheduled. ? Running a monthly report to identify units with two failed inspections to ensure all have been abated correctly. ? Enforcing family obligations as needed when no access is granted. ? Implement weekly monitoring to ensure all units are properly abated and lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without a cure. The Authority will continue to execute these sound procedures to prevent further findings related to inspections while it continues to closely work with the HCV program. The Authority?s robust internal audit program began in the fiscal year 2021-22 by auditing a statistically significant random sample of 43 actions completed by the HCV contractor during the second year of the contract (October 2020 through September 2021) to ensure that all actions were in compliance and files contain all required documentation. This internal audit resulted in the Authority providing 16 recommendations to the HCV program to improve performance and compliance. The Authority will access the implementation of the recommendations. Although the HCV program subscribes to a quality control process, the Authority's internal audit program provides a method of it to reasonably understand the condition of the program as we fully understand our responsibility to ensure the program complies to all applicable laws and regulations governing HCV operations. The HCV program is a part of our continuous monitoring process. Anticipated Implementation Date September 30, 2023 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor The Authority?s Office of Program Excellence
2020-003
FAC accepted this audit on October 10, 2021 — management decision was due April 10, 2022.
Finding Reference: 2020-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Reasonable Rent, Housing Quality Standards Inspections, and Housing Assistance Payment Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516(a), the Authority is required to conduct a re-examination of family income and composition at least annually. The Authority is also subject to the following special tests and provisions: 1. The Public Housing Agency (PHA) must maintain records to document the basis for the determination that rent to owner is reasonable in accordance with the PHA?s administrative plan at initial leasing and during the term of the contract (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). 2. The PHA must inspect the unit leased to a family prior to the initial term of the lease, at least biennially during assisted occupancy, and at other times as needed, to determine if the unit meets Housing Quality Standards (HQS). The PHA must also conduct quality control re-inspections, and prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405). 3. The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. (24 CFR section 982.158 and 24 CFR part 982, subpart K). The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for numerous statutory and regulatory requirements for the Housing Choice Voucher program. HUD issued various PIH notices that provided various waivers and alternative requirements, including the flexibility to perform biennial HQS inspections as soon as reasonably possible, but no later than 1 year from the date on which the biennial inspection would have been required in the absence of a waiver. Condition During our audit, we selected a statistically valid sample of one monthly subsidy payment for the fiscal year ended September 30, 2020 for each of 60 selected participants out of a total population of 12,876 program participants and noted the following deficiencies: 1. For six participants, the third-party income verification did not agree to the income amount on the HUD-50058 form. 2. For one participant, the participant files did not contain third-party income verification to support the determination of tenant rent and housing assistance payment. 3. For one participant, annual re-examination eligibility documents, such as personal declaration, social security number, and declaration of section 214 status, were not maintained in the participant files. 4. For one participant, the rent reasonableness form was not maintained in the participant files. 5. For one participant, the HQS inspection support was not maintained in the participant files. 6. For six participants, the HQS inspections were not performed within the required timeframe. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure all related tenant records and documents are properly filed and that all re-examinations and HQS inspections are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility, rent reasonableness, and housing assistance payments, which could result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $141,175 represent HAPs for the months for which compliance with eligibility, rent reasonableness, or housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,372,204 in HAPs to total HAPs of $309,823,317 for the year, the likely questioned costs were $31,875,222. Known questioned costs for participants whose HQS inspections were not available for review or performed within the required timeframe totaled $129,427. Projected questioned costs were $29,222,728. Identification of Repeat Findings This is a repeat of finding number 2019-004 reported in the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and to strengthen its record retention and filing systems. Furthermore, staff need to be continually trained on the rules and regulations to properly administer eligibility determinations and re-examinations, rent and HAP calculations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2020-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Reasonable Rent, Housing Quality Standards Inspections, and Housing Assistance Payment Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516(a), the Authority is required to conduct a re-examination of family income and composition at least annually. The Authority is also subject to the following special tests and provisions: 1. The Public Housing Agency (PHA) must maintain records to document the basis for the determination that rent to owner is reasonable in accordance with the PHA?s administrative plan at initial leasing and during the term of the contract (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). 2. The PHA must inspect the unit leased to a family prior to the initial term of the lease, at least biennially during assisted occupancy, and at other times as needed, to determine if the unit meets Housing Quality Standards (HQS). The PHA must also conduct quality control re-inspections, and prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405). 3. The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. (24 CFR section 982.158 and 24 CFR part 982, subpart K). The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for numerous statutory and regulatory requirements for the Housing Choice Voucher program. HUD issued various PIH notices that provided various waivers and alternative requirements, including the flexibility to perform biennial HQS inspections as soon as reasonably possible, but no later than 1 year from the date on which the biennial inspection would have been required in the absence of a waiver. Condition During our audit, we selected a statistically valid sample of one monthly subsidy payment for the fiscal year ended September 30, 2020 for each of 60 selected participants out of a total population of 12,876 program participants and noted the following deficiencies: 1. For six participants, the third-party income verification did not agree to the income amount on the HUD-50058 form. 2. For one participant, the participant files did not contain third-party income verification to support the determination of tenant rent and housing assistance payment. 3. For one participant, annual re-examination eligibility documents, such as personal declaration, social security number, and declaration of section 214 status, were not maintained in the participant files. 4. For one participant, the rent reasonableness form was not maintained in the participant files. 5. For one participant, the HQS inspection support was not maintained in the participant files. 6. For six participants, the HQS inspections were not performed within the required timeframe. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure all related tenant records and documents are properly filed and that all re-examinations and HQS inspections are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility, rent reasonableness, and housing assistance payments, which could result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $141,175 represent HAPs for the months for which compliance with eligibility, rent reasonableness, or housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,372,204 in HAPs to total HAPs of $309,823,317 for the year, the likely questioned costs were $31,875,222. Known questioned costs for participants whose HQS inspections were not available for review or performed within the required timeframe totaled $129,427. Projected questioned costs were $29,222,728. Identification of Repeat Findings This is a repeat of finding number 2019-004 reported in the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and to strengthen its record retention and filing systems. Furthermore, staff need to be continually trained on the rules and regulations to properly administer eligibility determinations and re-examinations, rent and HAP calculations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual recertifications since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor to ensure this occurs. As a result of the COVID-19 health emergency, the Authority implemented the HUD waivers and suspended all biennial inspections. Under these waivers, the Authority has until June 30, 2022, to complete all 2020 inspections and until December 31, 2022, to complete delayed 2021 inspections. The third-party contractor, under the direction of the Authority, will schedule inspections due in January 2022, approximately 30 to 60 days prior to the due date. Additional quality control processes have been implemented to ensure that notices are properly sent and retained. Some key strategies and controls in place are as follows: ? Ensure that solicitations are mailed per the Administrative Plan requirements. ? Follow-up with tenants out of compliance with Administrative Plan requirements by mailing the annual recertification notice three times, performing two calls, and if neither of these solicit a returned packet, sending an inspector to the tenant?s address to physically deliver the packet and answer any questions. ? Implement weekly monitoring to ensure all Annual Recertification are processed correctly and tenants are given proper notice of any rent increase. ? Operate a robust Quality Control program (QC) and review files in compliance with HUD?s Section Eight Management Assessment Program requirements. The QC team will review 50% of the transactions with financial impact. ? Implement quarterly trainings to provide refresher trainings based on error trends to all staff. The Authority will continue to execute these sound procedures to prevent further findings related to annual recertifications and inspections. The Authority will continue an improved feedback mechanism for internal quality control review, including a new file audit process highlighted below. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor The Authority?s Office of Program Excellence
2019-004
Finding Reference: 2020-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 967 tenants with failed inspections during the fiscal year, we identified 17 cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $110,628, which represents housing assistance payments (HAPs) made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is a repeat of finding number 2019-005 reported in the year ended September 30, 2019. Recommendation The Authority should develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2020-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 967 tenants with failed inspections during the fiscal year, we identified 17 cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $110,628, which represents housing assistance payments (HAPs) made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is a repeat of finding number 2019-005 reported in the year ended September 30, 2019. Recommendation The Authority should develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual recertifications since outsourcing the programmatic and financial administration functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor to ensure this occurs. The Authority has developed a robust internal audit program. In the beginning of fiscal year 2020-21, the Authority audited a statistically significant random sample of 96 actions completed by the HCV contractor during the first year of the contract (October 2019 through September 2020) to ensure that all actions were completed appropriately and that files contain all required documents. As a result, the Authority provided 26 recommendations to the contractor to improve performance and compliance and will follow-up on the implementation of the recommendations. While the HCV contractor is also implementing a quality control process, the Authority?s internal audit program provides another layer of needed review. This will be an ongoing process of the continuous monitoring program. As the Authority closes fiscal year 2020-21, the Authority will again select a statistically significant random sample of actions completed in the second year of the contract. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor The Authority?s Office of Program Excellence
2019-005
Finding Reference: 2020-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.515(a) and 24 CFR 882.808(i), the Authority is required to conduct a re-examination of family income and composition at least once every 12 months. Upon verification of the information, the Authority must make appropriate adjustments in the total tenant payment in accordance with 24 CFR part 5, subpart F, and verify that only one individual is occupying the unit. The Authority must adjust tenant rent and the housing assistance payment (HAP) to reflect any change in total tenant payment. Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allows public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 60 participants out of a total population of 262 active program participants and noted the following deficiencies: 1. The Authority did not conduct Housing Quality Standards (HQS) inspections within the required timeframe for 16 participants. 2. The third party income verification document could not be located for four participants. 3. The personal declaration form could not be located for one participant. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility and tenant re-certifications, which may result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $38,043 and $108,453 of HAPs for the months for which compliance with eligibility and HQS requirements, respectively, are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $581,679 in HAPs to total HAPs of $1,737,628 for the year, the likely questioned costs were $113,644 and $323,976 for eligibility and HQS requirements, respectively. Identification of Repeat Finding This is a repeat of finding 2019-006 reported for the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer eligibility determinations and re-examinations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2020-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.515(a) and 24 CFR 882.808(i), the Authority is required to conduct a re-examination of family income and composition at least once every 12 months. Upon verification of the information, the Authority must make appropriate adjustments in the total tenant payment in accordance with 24 CFR part 5, subpart F, and verify that only one individual is occupying the unit. The Authority must adjust tenant rent and the housing assistance payment (HAP) to reflect any change in total tenant payment. Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allows public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 60 participants out of a total population of 262 active program participants and noted the following deficiencies: 1. The Authority did not conduct Housing Quality Standards (HQS) inspections within the required timeframe for 16 participants. 2. The third party income verification document could not be located for four participants. 3. The personal declaration form could not be located for one participant. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility and tenant re-certifications, which may result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $38,043 and $108,453 of HAPs for the months for which compliance with eligibility and HQS requirements, respectively, are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $581,679 in HAPs to total HAPs of $1,737,628 for the year, the likely questioned costs were $113,644 and $323,976 for eligibility and HQS requirements, respectively. Identification of Repeat Finding This is a repeat of finding 2019-006 reported for the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer eligibility determinations and re-examinations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual recertifications since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor. Some key strategies and controls in place are as follows: ? Ensure that solicitations are mailed per the Administrative Plan requirements. ? Follow up with tenants out of compliance with Administrative Plan requirements by mailing the notice three times, performing two calls, and if neither of these solicit a returned packet, sending an inspector to the tenant?s address to physically deliver the packet and answer any questions. ? Implement weekly monitoring to ensure all units are properly abated, lifted timely when units pass inspections and contracts are properly terminated after being in abatement for 180 days without cure. The Authority will continue to execute these sound procedures to prevent further findings related to annual recertifications and inspections. The Authority will continue an improved feedback mechanism for internal quality control review, including a file audit process highlighted above. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor The Authority?s Office of Program Excellence
2019-006
Finding Reference: 2020-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility, Reporting, and Special Tests and Provisions ? Environmental Contaminates Testing and Remediation Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least one every three years. Pursuant to Section 7-I.C.of the Authority?s Proposed Admissions and Continued Occupancy Policy dated October 1, 2019, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. In addition, the Authority must test for and remediate environmental contaminates, such as lead-based paint, radon gas, and mold, to assure that public housing meets the physical condition standards for health and safety considerations set forth in 24 CFR section 5.703. 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition We tested a statistically valid sample of one month for each of 60 participants selected from a population of 1,103 program participants who received public housing during the fiscal year ended September 30, 2020. Identified issues are listed below: 1. For four participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For one participant, the third-party income verifications did not support the calculation of the wages on the EIV and HUD 50058 form. 3. For 23 participants, the Authority was not able to provide documentation on the testing or remediation of environmental contaminates. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2019-007 reported in the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2020-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility, Reporting, and Special Tests and Provisions ? Environmental Contaminates Testing and Remediation Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least one every three years. Pursuant to Section 7-I.C.of the Authority?s Proposed Admissions and Continued Occupancy Policy dated October 1, 2019, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. In addition, the Authority must test for and remediate environmental contaminates, such as lead-based paint, radon gas, and mold, to assure that public housing meets the physical condition standards for health and safety considerations set forth in 24 CFR section 5.703. 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition We tested a statistically valid sample of one month for each of 60 participants selected from a population of 1,103 program participants who received public housing during the fiscal year ended September 30, 2020. Identified issues are listed below: 1. For four participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For one participant, the third-party income verifications did not support the calculation of the wages on the EIV and HUD 50058 form. 3. For 23 participants, the Authority was not able to provide documentation on the testing or remediation of environmental contaminates. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2019-007 reported in the year ended September 30, 2019. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Authority?s Response & Actions Taken The Authority has developed procedures, systems, and controls to ensure compliance with tenant eligibility requirements, income calculations, and third-party verifications, and will revisit these procedures regularly. The Authority has undergone significant personnel changes due to the transition of its HCV program to third-party management. As a result, property managers and eligibility workers transitioned from the HCV Department to the Agency?s Public Housing Department. The Authority has provided comprehensive onboarding training and will implement an annual training plan that will increase the acumen of staff to prevent future findings in this area. The Public Housing Department?s current annual recertification rate is 86%, a decline that has been an ongoing during this pandemic as residents in our communities continue to shelter-in-place and avoid public spaces. The Authority is working closely with our property managers and eligibility workers to increase the recertification rate, despite the limitations placed on our residents and staff due to the impacts of the COVID-19 public health emergency. The Authority has been conducting interviews by phone or other remote options and have implemented the HUD COVID-19 waivers to complete as many annual recertifications as possible while ensuring residents remain safe. After being closed for over one year, the property offices on our sites reopened to the public on August 2, 2021. We anticipate that our recertifications will be completed more timely and accurately now that residents can safely start meeting with property office staff again. Currently, the Authority is expanding the internal audit program to include the Public Housing department. In the beginning of fiscal year 2021-22, the Authority will audit a random sample of actions completed by the public housing department to ensure that all actions were completed appropriately and that files contain all required documents. This will be an ongoing process of the continuous monitoring program. The Authority will continue to evaluate and improve its property performance according to HUD and the Authority?s standards, identify non-performing properties, and track improvement of non-performing assets. The Authority will also continue to perform evaluations quarterly and revise its corrective action plans, as necessary. Anticipated Implementation Date December 31, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action Kendra Crawford, Acting Director of Public Housing Operations
2019-007
FAC accepted this audit on December 30, 2020 — management decision was due June 30, 2021.
Finding Reference: 2019-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Reasonable Rent, Housing Quality Standards Inspections, and Housing Assistance Payment Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516(a), the Authority is required to conduct a re-examination of family income and composition at least annually. The Authority is also subject to the following special tests and provisions: 1. The Public Housing Agency (PHA) must maintain records to document the basis for the determination that rent to owner is reasonable in accordance with the PHA?s administrative plan at initial leasing and during the term of the contract (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). 2. The PHA must inspect the unit leased to a family prior to the initial term of the lease, at least biennially during assisted occupancy, and at other times as needed, to determine if the unit meets Housing Quality Standards (HQS). The PHA must also conduct quality control re-inspections, and prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405). 3. The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. (24 CFR section 982.158 and 24 CFR part 982, subpart K). Condition During our audit, we selected a statistically valid sample of one monthly subsidy payment for the fiscal year ended September 30, 2019 for each of 60 selected participants out of a total population of 14,407 program participants and noted the following deficiencies: 1. For seven participants, the third-party income verification did not agree to the income amount on the HUD-50058 form. 2. For nine participants, the participant files did not contain third-party income verification to support the determination of tenant rent and housing assistance payment. 3. For three participants, the applicant approval records that were required for new admissions were not signed by the manager to evidence proper review and approval. 4. For one newly ported-in participant, the Authority could not provide the necessary information, documentation, and the participant?s release forms for the Authority to verify income eligibility. 5. For seven participants, the rent change notice was not maintained in the participant files. 6. For five participants, annual re-examination eligibility documents, such as personal declaration, social security number, and declaration of section 214 status, were not maintained in the participant files. 7. For one participant, the Authority did not perform the annual re-examination within the 12-month period. 8. For seven participants, the rent reasonableness form was not maintained in the participant. 9. For thirteen participants, the HQS inspection was not performed within the required timeframe. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations and HQS inspections are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility, rent reasonableness, and housing assistance payments, which could result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $539,729 represent HAPs for the months for which compliance with eligibility, rent reasonableness, housing assistance payments, and/or HQS requirements are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,411,356 in HAPs to total HAPs of $286,023,161 for the year, the likely questioned costs were $109,380,620. Identification of Repeat Findings This is a repeat of finding number 2018-005 reported in the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, as well as its internal record retention and filing systems. Furthermore, staff needs to be continually trained on the rules and regulations to properly administer eligibility determinations and re-examinations, rent and HAP calculations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2019-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Reasonable Rent, Housing Quality Standards Inspections, and Housing Assistance Payment Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.516(a), the Authority is required to conduct a re-examination of family income and composition at least annually. The Authority is also subject to the following special tests and provisions: 1. The Public Housing Agency (PHA) must maintain records to document the basis for the determination that rent to owner is reasonable in accordance with the PHA?s administrative plan at initial leasing and during the term of the contract (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). 2. The PHA must inspect the unit leased to a family prior to the initial term of the lease, at least biennially during assisted occupancy, and at other times as needed, to determine if the unit meets Housing Quality Standards (HQS). The PHA must also conduct quality control re-inspections, and prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405). 3. The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. (24 CFR section 982.158 and 24 CFR part 982, subpart K). Condition During our audit, we selected a statistically valid sample of one monthly subsidy payment for the fiscal year ended September 30, 2019 for each of 60 selected participants out of a total population of 14,407 program participants and noted the following deficiencies: 1. For seven participants, the third-party income verification did not agree to the income amount on the HUD-50058 form. 2. For nine participants, the participant files did not contain third-party income verification to support the determination of tenant rent and housing assistance payment. 3. For three participants, the applicant approval records that were required for new admissions were not signed by the manager to evidence proper review and approval. 4. For one newly ported-in participant, the Authority could not provide the necessary information, documentation, and the participant?s release forms for the Authority to verify income eligibility. 5. For seven participants, the rent change notice was not maintained in the participant files. 6. For five participants, annual re-examination eligibility documents, such as personal declaration, social security number, and declaration of section 214 status, were not maintained in the participant files. 7. For one participant, the Authority did not perform the annual re-examination within the 12-month period. 8. For seven participants, the rent reasonableness form was not maintained in the participant. 9. For thirteen participants, the HQS inspection was not performed within the required timeframe. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations and HQS inspections are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility, rent reasonableness, and housing assistance payments, which could result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $539,729 represent HAPs for the months for which compliance with eligibility, rent reasonableness, housing assistance payments, and/or HQS requirements are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,411,356 in HAPs to total HAPs of $286,023,161 for the year, the likely questioned costs were $109,380,620. Identification of Repeat Findings This is a repeat of finding number 2018-005 reported in the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, as well as its internal record retention and filing systems. Furthermore, staff needs to be continually trained on the rules and regulations to properly administer eligibility determinations and re-examinations, rent and HAP calculations, and HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2019-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Rent Reasonableness, Housing Quality Standards Inspections, and Housing Assistance Payment Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual recertifications since outsourcing the programmatic and financial administration functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor. Some key strategies and controls in place are as follows: ? Ensure that solicitations are mailed per the Administrative Plan requirements. ? Follow up with tenants out of compliance with Administrative Plan requirements by mailing the notice three times, performing two calls, and if neither of these solicit a returned packet, sending an inspector to the tenant?s address to physically deliver the packet and answer any questions. ? Implement weekly monitoring to ensure all Annual Recertification are processed correctly and tenants are given proper notice of any rent increase. The Authority will continue to execute these sound procedures to prevent further findings related to annual re-certifications and inspections. The Authority will continue an improved feedback mechanism for internal quality control review, including a new file audit process highlighted below. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Amanda Sobrepe?a, Office of Program Excellence
2018-005
Finding Reference: 2019-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 2,025 tenants with failed inspections conducted during the fiscal year, we selected a statistically valid sample of 60 failed inspections and noted the following: a) The Authority did not perform the follow up inspection within the required timeframe for three participants. b) The Authority did not perform the follow up inspection nor issue abatement notice for thirteen participants. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $79,994, which represents housing assistance payments (HAPs) made to the property owners for the months in which 1) the Authority did not perform a follow-up inspection after a failed inspection, and/or 2) the Authority did not abate the HAPs for the failed inspection. Identification of Repeat Finding This is a repeat of finding number 2018-006 reported in the year ended September 30, 2018. Recommendation The Authority should develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that the property owners whose units with failed HQS inspections have its payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2019-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 2,025 tenants with failed inspections conducted during the fiscal year, we selected a statistically valid sample of 60 failed inspections and noted the following: a) The Authority did not perform the follow up inspection within the required timeframe for three participants. b) The Authority did not perform the follow up inspection nor issue abatement notice for thirteen participants. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS is being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $79,994, which represents housing assistance payments (HAPs) made to the property owners for the months in which 1) the Authority did not perform a follow-up inspection after a failed inspection, and/or 2) the Authority did not abate the HAPs for the failed inspection. Identification of Repeat Finding This is a repeat of finding number 2018-006 reported in the year ended September 30, 2018. Recommendation The Authority should develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that the property owners whose units with failed HQS inspections have its payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2019-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (HQS Enforcement) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken Currently, the Authority is developing a robust internal audit program. In the beginning of fiscal year 2020-21, the Authority will audit a random sample of 96 actions completed by the HCV contractor during the first year of the contract to ensure that all actions were completed appropriately and that files contain all required documents. This will be an ongoing process of the continuous monitoring program. While the HCV contractor is also implementing a quality control process, the Authority?s internal audit program will provide another layer of needed review. As the Authority improves processes and finds efficiencies, adequate monitoring of the actions of the contractor, including regular internal reviews of their reporting, and an internal audit program are critical to ensuring all actions are processed in line with federal, state, and local requirements. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Amanda Sobrepe?a, Office of Program Excellence
2018-006
Finding Reference: 2019-006 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.515(a) and 24 CFR 882.808(i), the Authority is required to conduct a re-examination of family income and composition at least once every 12 months. Upon verification of the information, the Authority must make appropriate adjustments in the total tenant payment in accordance with 24 CFR part 5, subpart F, and verify that only one individual is occupying the unit. The Authority must adjust tenant rent and the housing assistance payment (HAP) to reflect any change in total tenant payment. Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 60 participants out of a total population of 311 active program participants and noted the following deficiencies: ? The Authority did not conduct Housing Quality Standards (HQS) inspections within the required timeframe for 25 participants. ? The participant income as reported on the HUD-50058 form did not match information from the Enterprise Income Verification (EIV) System or the third party verification for one participant. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility and tenant re-certifications, which may result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $207,050 represent HAPs for the months for which compliance with eligibility and HQS requirements are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $550,776 in HAPs to total HAPs of $3,186,115 for the year, the likely questioned costs were $1,197,738. Identification of Repeat Finding This is a repeat of finding 2018-007 reported for the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the tested files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer eligibility in accordance with HUD requirements.
Show full finding ▾Hide full finding ▴Finding Reference: 2019-006 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 882.515(a) and 24 CFR 882.808(i), the Authority is required to conduct a re-examination of family income and composition at least once every 12 months. Upon verification of the information, the Authority must make appropriate adjustments in the total tenant payment in accordance with 24 CFR part 5, subpart F, and verify that only one individual is occupying the unit. The Authority must adjust tenant rent and the housing assistance payment (HAP) to reflect any change in total tenant payment. Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. Pursuant to 24 CFR 882.808, the Authority is required to keep records and make any reports that HUD may require within timeframe required. Condition During our audit we selected a statistically valid sample of 60 participants out of a total population of 311 active program participants and noted the following deficiencies: ? The Authority did not conduct Housing Quality Standards (HQS) inspections within the required timeframe for 25 participants. ? The participant income as reported on the HUD-50058 form did not match information from the Enterprise Income Verification (EIV) System or the third party verification for one participant. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all related tenant records and documents are in properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility and tenant re-certifications, which may result in incorrect housing assistance payments. HAP may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs of $207,050 represent HAPs for the months for which compliance with eligibility and HQS requirements are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $550,776 in HAPs to total HAPs of $3,186,115 for the year, the likely questioned costs were $1,197,738. Identification of Repeat Finding This is a repeat of finding 2018-007 reported for the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the tested files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the annual re-examinations due are completed in a timely basis, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer eligibility in accordance with HUD requirements.
Reference Number: 2019-006 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project Based Cluster Federal Catalog Number: 14.249 and 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual recertifications since outsourcing the programmatic and financial administration functions of the HCV program to a third-party contractor. The Authority acknowledges that more progress in this area is required and continues to work diligently with the third-party HCV contractor. Some key strategies and controls in place are as follows: ? Ensure that solicitations are mailed per the Administrative Plan requirements. ? Follow up with tenants out of compliance with Administrative Plan requirements by mailing the notice three times, performing two calls, and if neither of these solicit a returned packet, sending an inspector to the tenant?s address to physically deliver the packet and answer any questions. ? Implement weekly monitoring to ensure all Annual Recertification are processed correctly and tenants are given proper notice of any rent increase. The Authority will continue to execute these sound procedures to prevent further findings related to annual re-certifications and inspections. The Authority will continue to execute the strong procedures to prevent further findings related to annual re-certifications and inspections. The Authority will continue an improved feedback mechanism for internal quality control review, including a new file audit process highlighted above. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Amanda Sobrepe?a, Office of Program Excellence
2018-007
Finding Reference: 2019-007 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Reporting Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a reexamination of family composition at least annually, and must conduct a reexamination of family income at least one every three years. Pursuant to Section 7-I.C.of the SFHA Policy, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertification?s of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, 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. In the report, the Authority should include the tenant rent at line 13k or 3x) based on the result of the examination and collect the amount from tenant properly. The Authority is authorized to obtain criminal conviction records from law enforcement agencies to screen applicants for approval for RAD assistance. This assists the Authority in complying with HUD requirements and SFHA policies to deny assistance to applicants who are engaging in or have engaged in certain criminal activities. Per 24 CFR 5.903, in order for the Authority to obtain access to the records, they must require every applicant family to submit a consent form signed by each adult household member. According to 24 CFR 960.204, grounds for denial of admission for criminal activity or drug abuse by household members include 1) persons evicted for drug-related criminal activity, 2) persons engaging in illegal use of a drug, 3) persons convicted of methamphetamine production and 4) persons subject to sex offender registration requirement According to the Chapter 9, Section 9-I.D of the SFHA Policy provides that the Authority will notify the family at least 30 days in advance of an increase in tenant rent. The SFHA Policy does not specify the timeline of notifying family about a decrease in tenant rent. The Authority collects ?Acknowledgement of Changing Monthly Rent.? 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition a statistically valid sample of one monthly subsidy payment during the fiscal year ended September 30, 2019 for each of 60 participants selected from a population of 1,444 program participants. We identified 22 participants with noncompliance. Identified issues are listed below: a) For twelve participants, the Authority was not able to provide relevant documentation for our review. b) For one participant, a redetermination and an updated HUD 50058 report was not completed within the past 12 months of the selected monthly payment. c) For one participant, the Authority was not able to provide adequate supporting documentation to support the legal status of the participant. d) For one participant, the third party income verifications did not support the calculation of the wages on the EIV/ ST&R and HUD 50058 form e) For two participants, the social security benefit document and rent computation sheet could not be located to support social security benefit or wages on HUD 50058 form. f) For one participant, there was no rent computation sheet to support the Total Tenant Payment from HUD 50058 form and the rent roll. g) For four participants, the participant?s file did not include the birth certificate and the social security number (SSN), which are required to establish eligibility. h) For one participant, the amounts billed to participants within the rent rolls did not match the amount reported in the corresponding HUD 50058 rental calculation form. i) For three participants, there was no evidence of manager review or approval of HUD 50058 form. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This finding is similar to the finding number 2018-008 reported in the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the tested files and perform a quality control review of a larger sample of the population. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2019-007 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Reporting Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a reexamination of family composition at least annually, and must conduct a reexamination of family income at least one every three years. Pursuant to Section 7-I.C.of the SFHA Policy, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertification?s of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, 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. In the report, the Authority should include the tenant rent at line 13k or 3x) based on the result of the examination and collect the amount from tenant properly. The Authority is authorized to obtain criminal conviction records from law enforcement agencies to screen applicants for approval for RAD assistance. This assists the Authority in complying with HUD requirements and SFHA policies to deny assistance to applicants who are engaging in or have engaged in certain criminal activities. Per 24 CFR 5.903, in order for the Authority to obtain access to the records, they must require every applicant family to submit a consent form signed by each adult household member. According to 24 CFR 960.204, grounds for denial of admission for criminal activity or drug abuse by household members include 1) persons evicted for drug-related criminal activity, 2) persons engaging in illegal use of a drug, 3) persons convicted of methamphetamine production and 4) persons subject to sex offender registration requirement According to the Chapter 9, Section 9-I.D of the SFHA Policy provides that the Authority will notify the family at least 30 days in advance of an increase in tenant rent. The SFHA Policy does not specify the timeline of notifying family about a decrease in tenant rent. The Authority collects ?Acknowledgement of Changing Monthly Rent.? 24 CFR 982.516 requires internal controls be in place to ensure compliance with HUD requirements, as well as, complete and accurate tenant records. Condition a statistically valid sample of one monthly subsidy payment during the fiscal year ended September 30, 2019 for each of 60 participants selected from a population of 1,444 program participants. We identified 22 participants with noncompliance. Identified issues are listed below: a) For twelve participants, the Authority was not able to provide relevant documentation for our review. b) For one participant, a redetermination and an updated HUD 50058 report was not completed within the past 12 months of the selected monthly payment. c) For one participant, the Authority was not able to provide adequate supporting documentation to support the legal status of the participant. d) For one participant, the third party income verifications did not support the calculation of the wages on the EIV/ ST&R and HUD 50058 form e) For two participants, the social security benefit document and rent computation sheet could not be located to support social security benefit or wages on HUD 50058 form. f) For one participant, there was no rent computation sheet to support the Total Tenant Payment from HUD 50058 form and the rent roll. g) For four participants, the participant?s file did not include the birth certificate and the social security number (SSN), which are required to establish eligibility. h) For one participant, the amounts billed to participants within the rent rolls did not match the amount reported in the corresponding HUD 50058 rental calculation form. i) For three participants, there was no evidence of manager review or approval of HUD 50058 form. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly filed and that all re-examinations are completed within the specified due dates. Effect The Authority is not in compliance with HUD requirements regarding eligibility re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This finding is similar to the finding number 2018-008 reported in the year ended September 30, 2018. Recommendation The Authority should correct the deficiencies noted in the tested files and perform a quality control review of a larger sample of the population. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2019-007 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Catalog Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Reporting Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has developed procedures, systems, and controls to ensure compliance with tenant eligibility requirements, income calculations, and third-party verifications, and will revisit these procedures regularly. The Authority has undergone significant personnel changes due to the transition of its HCV program to third-party management. As a result, property managers and eligibility workers transitioned to its Public Housing Department. The Authority has provided comprehensive onboarding training and will develop and implement an annual training plan that will increase the acumen of staff to prevent future findings in this area. The Public Housing Department?s current annual re-examination rate is 88%. The Authority is working closely with our property managers to increase the re-examination rate, despite the limitations placed on our residents and staff due to the impacts of the COVID-19 public health emergency. The Authority will continue to evaluate and improve its property performance according to HUD and the Authority?s standards, identify non-performing properties, and track improvement of non-performing assets. The Authority will also continue to perform evaluations quarterly and revise its corrective action plans, as necessary. Anticipated Implementation Date September 30, 2021 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action Kendra Crawford, Acting Director of Public Housing Operations
2018-008
Finding Reference: 2019-008 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moderate Rehabilitation Single Room Occupancy Federal Catalog Number: 14.249 Federal Grant Number: Not Applicable Category of Finding: Reporting Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria 24 CFR 882.808(p) requires that each recipient of assistance to keep any records and make any reports that HUD may require within the timeframe required. The HUD-52663, Requisition for Partial Payment of Annual Contributions (OMB No. 2577-0169), report is required on Section 8 project-based programs involving public housing agencies (PHAs)/private-owners and HUD/PHA owners. It provides for PHAs to indicate requested funds and monthly amounts, and is due 45 days after the end of the PHA?s fiscal year. Condition The Authority submitted 7 HUD-52663 reports for FY 2019. All of these reports were submitted on September 13, 2018 or 41 days after the report due date. Cause of Condition The information used to compile the reports is provided by the individual property owners. As such, it is a lengthy process for the Authority to gather and review the source data and compile the report for submission to HUD. In addition, the Authority experienced significant staff turnover during the year, which resulted in delays in the completion of the HUD-52663 reports. Effect The Authority did not submit the required report within the required timeframe. Questioned Costs Not applicable. Identification of Repeat Findings This is a repeat to the finding number 2018-009 reported in the year ended September 30, 2018. Recommendation We recommend that the Authority provide the instructions of the required report information to all single room occupancy properties owners who are responsible to gather and submit timely reports. Also, the Authority should develop a contingency plan to ensure timely submission of reports in the event of personnel turnover. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Reference: 2019-008 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moderate Rehabilitation Single Room Occupancy Federal Catalog Number: 14.249 Federal Grant Number: Not Applicable Category of Finding: Reporting Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria 24 CFR 882.808(p) requires that each recipient of assistance to keep any records and make any reports that HUD may require within the timeframe required. The HUD-52663, Requisition for Partial Payment of Annual Contributions (OMB No. 2577-0169), report is required on Section 8 project-based programs involving public housing agencies (PHAs)/private-owners and HUD/PHA owners. It provides for PHAs to indicate requested funds and monthly amounts, and is due 45 days after the end of the PHA?s fiscal year. Condition The Authority submitted 7 HUD-52663 reports for FY 2019. All of these reports were submitted on September 13, 2018 or 41 days after the report due date. Cause of Condition The information used to compile the reports is provided by the individual property owners. As such, it is a lengthy process for the Authority to gather and review the source data and compile the report for submission to HUD. In addition, the Authority experienced significant staff turnover during the year, which resulted in delays in the completion of the HUD-52663 reports. Effect The Authority did not submit the required report within the required timeframe. Questioned Costs Not applicable. Identification of Repeat Findings This is a repeat to the finding number 2018-009 reported in the year ended September 30, 2018. Recommendation We recommend that the Authority provide the instructions of the required report information to all single room occupancy properties owners who are responsible to gather and submit timely reports. Also, the Authority should develop a contingency plan to ensure timely submission of reports in the event of personnel turnover. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Reference Number: 2018-008 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moderate Rehabilitation Single Room Occupancy Federal Catalog Number: 14.249 Federal Grant Number: Not Applicable Category of Finding: Reporting Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Authority?s Response & Actions Taken The Authority has undergone significant personnel changes, impacting some staff who were previously responsible for preparing the Section 8 reports. Due to the staff transition, the fiscal year 2018 HUD Form 52663 was submitted late on September 18, 2018. However, the fiscal year 2019 HUD Form 52681 was submitted to HUD on time, November 7, 2019. The Authority has trained two (2) current staff, one (1) Sr. Budget Analyst and one (1) Acting Budget Analyst II, to complete the HUD Form 52663 ? Partial Payment of Annual Contributions and HUD Form 52681 ? Voucher for Payment of Annual Contributions and Operating Statement. The Authority is committed to ensuring that future reports are completed on time and in adherence with all reporting requirements. Anticipated Implementation Date December 31, 2020 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action Mamadou Gning, Chief Financial Officer
2018-009
FAC accepted this audit on June 28, 2019 — management decision was due December 28, 2019.
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2017-005
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2017-006
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2017-007
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2017-009
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2017-011
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2017-013
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2016-005
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2016-006
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2016-007
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2016-008
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2016-009
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2016-010
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2016-011
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2016-017
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2015-005
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2015-006
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2015-007
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2015-009
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2015-011
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2015-012
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