Housing Authority of the County of MarinLocal Government

Finding 2024-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Assistance Listing Numbers: 14.871, 14.879, 14.EHV Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,533 units. Of a sample size of thirty-six (36) tenant files, the following was noted:  Verification of income was unable to be recalculated in 4 files  Verification of assets was unable to be provided in 1 file  HUD 50058 annual recertification was not filed timely in 2 files  Citizen Declaration Section 214 form was unable to be provided in 9 files. Our sample size is statistically valid. Known Questioned Costs: $84,235 Cause: There is a material weakness in the Housing Voucher Cluster in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster Programs are in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures over the maintenance of tenant files that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster to ensure that established internal control policies are being followed on a timely basis.

Finding 2024-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Assistance Listing Numbers: 14.871, 14.879, 14.EHV Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family biennially in order to determine if the unit meets HQS standards, and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). These inspection reports are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management there were inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of thirty-six (36) units, three (3) units did not have biennial HQS inspections performed timely. Our sample size is statistically valid. Known Questioned Costs: $75,684 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Choice Vouchers Programs are in material non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures over HQS inspections that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Housing Voucher Cluster Programs and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2023-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, 14.EHV Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Yes - Mainstream Vouchers - Yes - Emergency Housing Vouchers - No Material Weakness and Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,434 units. Of a sample size of fifty-six (56) tenant files, the following was noted:  HUD form 9886 was unable to be provided in 4 files  Verification of income was unable to be provided in 5 files  Verification of assets was unable to be provided in 4 files  HUD 50058 annual recertification was not filed timely in 8 files  Original Application was unable to be provided in 12 files  Citizen Declaration Section 214 form was unable to be provided in 2 files  Lead based paint form was unable to be provided in 16 files  Signed lease was unable to be provided in 6 files. Our sample size is statistically valid. Known Questioned Costs: - 14.871 - Section 8 Housing Choice Vouchers - $65,025 - 14.879 - Mainstream Vouchers - $31,974 - 14.EHV - Emergency Housing Vouchers - $14,095 Cause: There is a material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs and a significant deficiency in the Emergency Housing Vouchers program in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers programs are in material non-compliance, and the Emergency Housing Vouchers program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster to ensure that established internal control policies are being followed on a timely basis.

Finding 2023-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: - Section 8 Housing Choice Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.EHV Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family biennially in order to determine if the unit meets HQS standards, and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). These inspection reports are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management there were inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of forty-four (44) units, twelve (12) units did not have biennial HQS inspections performed timely. Our sample size is statistically valid. Known Questioned Costs: - 14.871 - Section 8 Housing Choice Vouchers - $246,504 - 14.EHV - Emergency Housing Vouchers - $30,252 Finding 2023-002: (continued) Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers and Emergency Housing Vouchers programs are in material non-compliance with the with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Emergency Housing Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority did not properly abate five (5) out of thirty-six (36) annual failed inspections selected for testing. Context: The Authority did not properly abate five (5) out of thirty-six (36) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: - 14.871 - Section 8 Housing Choice Vouchers - $11,067 - 14.879 - Mainstream Vouchers - $160 - 14.EHV - Emergency Housing Vouchers - $341 Cause: There is a significant deficiency in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers programs are in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the significant deficiency in the Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2023-004: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Assistance Listing Numbers: 14.850 Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 460 units. Of a sample size of seventeen (17) tenant files, the following was noted:  HUD 50058 annual recertification was not filed timely in 2 files  Original Application was missing in 1 file  Verification of income was missing in 3 files  Verification of assets was missing in 2 files Our sample size is statistically valid. Known Questioned Costs: $28,961 Finding 2023-004 (continued): Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Public and Indian Housing Program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2023-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Public Housing Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Public and Indian Housing Program were selected from the wait list in an order that is in accordance with the Authority’s Admissions and Continued Occupancy Policy. Context: Of a sample size of nine (9) new move-ins, nine (9) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $89,397 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to the public housing waiting list. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Public and Indian Program is in material non-compliance with the special tests and provisions type of compliance related to selection of applicants from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight on the maintenance of the waiting list and process of housing applicants to better monitor adequacy with compliance requirements.

Finding 2023-006 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance - N. Special Tests and Provisions - Selection from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Section 8 Administrative Plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Section 8 Housing Choice Vouchers Program were selected from the wait list in an order that is in accordance with the Authority’s Section 8 Administrative Plan. Context: Of a sample size of thirteen (13) new move-ins, seven (7) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $181,533. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selection from the waiting list. The Authority has not properly housed applicants in compliance with program requirements. Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the eligibility type of compliance related to selection from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Section 8 Housing Choice Voucher Program to ensure that established internal control policies are being followed on a timely basis.

Finding 2022-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers Federal Catalog Numbers: 14.871 and 14.879 Noncompliance ? N. Special Tests and Provisions ? Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.Condition: Based upon inspection of the Authority?s files and on discussions with management, the Authority did not properly abate two (2) out of thirty-one (31) annual failed inspections selected for testing. Context: The Authority did not properly abate two (2) out of thirty-one (31) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: $1,925. Cause: There is a significant deficiency in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority agrees with the findings that some tenant file documents were essentially unavailable for examination at the time of the audit and that a system of consistent document filing, and regular file reviews are necessary. The ?missing? documents were subsequently found but in various electronic locations, thereby making them not easily accessible to the auditors. There were also timing issues, in that a recertification was begun in 2022 but not completed or made effective until 2023 once all documents had been received. The tenant documents will now be filed in one place, in Yardi as attachments to the Family Detail Info (FDI) screen in the proper subfolder depending upon subject (e.g. Assets, Income, Member). The Authority is working to create and label the subfolders needed for this purpose. The contractor and internal staff will receive detailed instructions on how to file all documents, from the receipt of documents from the tenant to the commemoration of the transaction in a HUD Form 50058. All will be required to sign a confirmation they received such instructions. All new staff responsible for collecting documents, processing transactions and creating 50058s will obtain training in the correct system of filing such documents as part of their on-boarding packet of trainings. The Authority will institute a quality control procedure for the regular review of random sample files at least quarterly to ensure that the filing system is being followed and the documents are complete and readily found.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers Federal Catalog Numbers: 14.871 and 14.879 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility. Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,313 units. Of a sample size of forty-five (45) tenant files, the following was noted: HUD form 9886 was missing in 1 file Verification of income was missing in 2 files Verification of assets was missing in 1 files HUD 50058 annual recertification was missing in 4 files Original Application was missing in 5 files Our sample size is statistically valid. Known Questioned Costs: $215,596. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority agrees with the findings that some tenant file documents were essentially unavailable for examination at the time of the audit and that a system of consistent document filing, and regular file reviews are necessary. The ?missing? documents were subsequently found but in various electronic locations, thereby making them not easily accessible to the auditors. There were also timing issues, in that a recertification was begun in 2022 but not completed or made effective until 2023 once all documents had been received. The tenant documents will now be filed in one place, in Yardi as attachments to the Family Detail Info (FDI) screen in the proper subfolder depending upon subject (e.g. Assets, Income, Member). The Authority is working to create and label the subfolders needed for this purpose. The contractor and internal staff will receive detailed instructions on how to file all documents, from the receipt of documents from the tenant to the commemoration of the transaction in a HUD Form 50058. All will be required to sign a confirmation they received such instructions. All new staff responsible for collecting documents, processing transactions and creating 50058s will obtain training in the correct system of filing such documents as part of their on-boarding packet of trainings. The Authority will institute a quality control procedure for the regular review of random sample files at least quarterly to ensure that the filing system is being followed and the documents are complete and readily found.

Finding 2022-003: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Federal Catalog Numbers: 14.850 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 456 units. Of a sample size of seventeen (17) tenant files, the following was noted: HUD 50058 annual recertification was missing in 1 file Original Application was missing in 2 files Citizenship Declaration was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $27,341. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Public and Indian Housing Program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority agrees with the findings that some tenant file documents were essentially unavailable for examination at the time of the audit and that a system of consistent document filing, and regular file reviews are necessary. The ?missing? documents were subsequently found but in various electronic locations, thereby making them not easily accessible to the auditors. There were also timing issues, in that a recertification was begun in 2022 but not completed or made effective until 2023 once all documents had been received. The tenant documents will now be filed in one place, in Yardi as attachments to the Family Detail Info (FDI) screen in the proper subfolder depending upon subject (e.g. Assets, Income, Member). The Authority is working to create and label the subfolders needed for this purpose. The contractor and internal staff will receive detailed instructions on how to file all documents, from the receipt of documents from the tenant to the commemoration of the transaction in a HUD Form 50058. All will be required to sign a confirmation they received such instructions. All new staff responsible for collecting documents, processing transactions and creating 50058s will obtain training in the correct system of filing such documents as part of their on-boarding packet of trainings. The Authority will institute a quality control procedure for the regular review of random sample files at least quarterly to ensure that the filing system is being followed and the documents are complete and readily found.

Finding 2022-004: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Continuum of Care Program Federal Catalog Numbers: 14.267 Noncompliance ? S. Special Tests and Provisions ? Reasonable Rental Rates Non Compliance Material to the Financial Statements: No Significant deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 71 units. Of a sample size of twenty-one (21) tenant files, the following was noted: HUD 50058 annual recertification was missing in 1 file Income Verification was missing in 2 files Our sample size is statistically valid. Known Questioned Costs: $30,581. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Continuum of Care Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has created and continues to improve a new central document management/retention and tracking system. Also, the Authority is improving its procurement system efficiency/trackability with the addition of the OpenGov procurement platform along with instituting Purchase Requests/Purchase Orders. The Authority is also reaching out to other agencies for best practices, guidance, and support. Finally, the Authority is retaining a consultant to evaluate the Authority?s current systems compared to other agencies/general best practices, and to make recommendations for further changes/improvements where necessary.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? N. Special Tests and Provisions ? Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority?s files and on discussions with management, the Authority did not properly abate seven (7) out of eighteen (18) annual failed inspections selected for testing. Context: The Authority did not properly abate seven (7) out of eighteen (18) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: $29,551 Cause: There is a significant deficiency in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: We agree with the Auditor?s observations on the re-inspection of the failed units and have implemented the following procedures to assure HQS compliance: ? Weekly inspection reports regarding any changes made to units with inspections-related payment holds, passed abatement cure inspections ? Running monthly and quarterly reports to cross-check against web-based system ? Bi-weekly calls with contractor to discuss unit inspections and processes.

Finding 2021-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: ousing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers. Federal Catalog Numbers: 14.871, 14.879, and 14.EHV Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,236 units. Of a sample size of forty-five (45) tenant files, the following was noted: ? HUD form 9886 was missing in 3 files ? Verification of income was missing in 17 files ? Verification of assets was missing in 5 files ? HUD 50058 annual recertification was missing in 5 files. Our sample size is statistically valid. Known Questioned Costs: $419,135. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: We agree with the Auditor?s observations on the inspection of the tenant files, and have implemented the following internal control procedures that will assure tenant file compliance: ? All tenant files will have a digital checklist which will be uploaded with the tenant file to a central share drive. ? A compliance report will be run quarterly and reviewed and monitored by the compliance contractor staff. ? Bi-weekly calls with compliance contractors to discuss tenant annual recertifications and procedures and corrective actions

Criteria - The Authority administers a Housing Choice Voucher Program (HCVP) funded by the U.S. Department of Housing and Urban Development (HUD). The HCVP provides rental assistance to help very-low income families afford decent, safe, and sanitary rental housing. The Authority must inspect units leased under the HCVP at the time of initial leasing and at least every two years thereafter to ensure the units meet Housing Quality Standards (HQS). For units under housing assistance payment (HAP) contracts that fail to meet HQS, the Authority must require the owner to correct life threatening deficiencies within 24 hours and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension period. If the owner does not correct the HQS deficiencies within the specified correction period, then the Authority must stop (abate) HAP for the unit or must terminate the HAP contract. In response to the COVID-19 pandemic, HUD provided waivers and/or concessions for many of its regulations. The PIH Notice 2020-05, issued April 10, 2020, temporarily suspended SEMAP assessment; waived the requirement for biennial HQS inspections until October 31, 2020; and established an alternative requirement for HQS enforcement allowing for owner self-certification of corrective measures taken, with no concessions made for the length of time allowed to remedy a failed HQS inspection. The PIH Notice 2020-33, issued November 30, 2020, provided an alternative requirement to biennial HQS inspections by allowing the Authority to rely on owner self-certification that the owner has no knowledge that life-threatening conditions exist in the unit. Statement of Condition - During the Authority's 2019 internal control testing for SEMAP (Section 8 Management Assessment Program) reporting, they recognized a weakness in controls over units which failed inspections more than once. Follow-up on these units with multiple failed inspections did not occur. This deficiency included units failing inspections for life threatening deficiencies. The Authority did not claim the points for this SEMAP indicator for the fiscal year ending December 31, 2019. Statement of Cause - The Authority contracts with a service provider to conduct a number of the unit inspections. Mid-year 2019, the Authority transitioned to new IT software. At the on-set of these new procedures, controls were not in place to communicate the status of certain unit inspections and to hand them off to the proper in-house personnel for follow-up. The monitoring of this situation did not improved throughout 2020. Effect - The Authority is unable to document that all units under HAP contract meet HQS. Questioned Costs - The questioned costs of non-compliance with the HQS enforcement regulations are undeterminable at this time. Perspective Information - Audit procedures were limited to a specific group of items. In this case, a list of units having failed the HQS inspection during the fiscal year ended December 31, 2019 and 2020. The objective of the procedures was to obtain an understanding of the Authority?s operations. Specifically, to determine the follow-up actions taken, if any, on units having failed an HQS inspection and to ultimately determine the Authority?s compliance with HUD regulations. We did not select items expected to represent the population as a whole. Once the deficiency was noted, we discussed the results with the Authority?s management. It was their representation that the deficiency began during the approximate time of their conversion to new software. We directed further testing in and out-side of this time period to gain additional understanding of the deficiency. We concluded that the condition began mid-year 2019 and has yet to be resolved. Identification of Repeat Finding - This is a repeat finding from the prior fiscal year. Recommendation - We recommend that the Authority strengthen their internal controls to ensure that all units under HAP contract meet HQS. Further, we recommend that the Authority immediately reinspect all units that failed their most recent HQS unit inspection, within the current regulations allowed by HUD during the COVID-19 pandemic. Authority Response - The Authority concurs with this finding and recognizes both the requirements and importance of conducting unit inspections and ensuring all units under contract meet the Housing Quality Standards (HQS). In the beginning of 2020, the world was hit with a global pandemic which caused a shutdown and shelter in place orders to be issued in the County of Marin in March 2020. To protect MHA staff and participants the shelter in place orders were followed and all HQS inspections were halted. In April 2020 The Department of Housing and Urban Development (HUD) issued Notice PIH 2020-05 which allowed Public Housing Authorities (PHA) to implement waivers surrounding COVID-19. Several of the items provided included HQS waivers which allowed PHAs to receive self-certifications when notified of an HQS deficiency in lieu of a physical inspection. MHA elected to implement the waivers offered by HUD which have been extended through December 31, 2021. Although HUD did not address units previously in failed status prior to the shelter in place orders, we now understand these units would fall under a unit where MHA was aware of a deficiency and therefore should have been followed up on with a self-certification and all were not. Prior to the audit finding MHA restarted HQS inspections and began with all units that previously failed. MHA has also put in place the following controls: Web-based data base to track each failed unit Weekly checks by contractors and internal staff to follow up on fails Running monthly reports to cross-check against web-based system Bi-weekly calls with contractors to discuss unit inspections and processes The Authority provides decent, safe, and sanitary housing to all of its participants. The deficiency was a result of a global pandemic, and with the above-mentioned controls in place it will not occur in the future.

2019-002 Housing Quality Standard Enforcement (CFDA # 14.871) Criteria - The Authority administers a Housing Choice Voucher Program (HCVP) funded by the U.S. Department of Housing and Urban Development (HUD). The HCVP provides rental assistance to help very-low income families afford decent, safe, and sanitary rental housing. The Authority must inspect units leased under the HCVP at the time of initial leasing and at least every two years thereafter to ensure the units meet Housing Quality Standards (HQS). For units under housing assistance payment (HAP) contracts that fail to meet HQS, the Authority must require the owner to correct life threatening deficiencies within 24 hours and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension period. If the owner does not correct the HQS deficiencies within the specified correction period, then the Authority must stop (abate) HAP for the unit or must terminate the HAP contract. Statement of Condition - During the Authority?s internal control testing for SEMAP (Section 8 Management Assessment Program) reporting, they recognized a weakness in controls over units which failed inspections more than once. Follow-up on these units with multiple failed inspections did not occur. This deficiency included units failing inspections for life threatening deficiencies. The Authority did not claim the points for this SEMAP indicator. Statement of Cause - The Authority contracts with a service provider to conduct a number of the unit inspections. Mid-year 2019, the Authority transitioned to new IT software. At the on-set of these new procedures, controls were not in place to communicate the status of certain unit inspections and to hand them off to the proper in-house personnel for follow-up. Effect - The Authority is unable to document that all units under HAP contract meet HQS. Questioned Costs - The questioned costs of non-compliance with the HQS enforcement regulations are undeterminable at this time. Perspective Information - Audit procedures were limited to a specific group of items. In this case, a list of units having failed the HQS inspection during the fiscal year ended December 31, 2019. The objective of the procedures was to obtain an understanding of the Authority?s operations. Specifically, to determine the follow-up actions taken, if any, on units having failed an HQS inspection and to ultimately determine the Authority?s compliance with HUD regulations. We did not select items expected to represent the population as a whole. Once the deficiency was noted, we discussed the results with the Authority?s management. It was their representation that the deficiency began during the approximate time of their conversion to new software. We directed further testing in and out-side of this time period to gain additional understanding of the deficiency. We concluded that the condition began mid-year 2019 and has yet to be resolved. Identification of Repeat Finding - This is not a repeat finding from the prior fiscal year. Recommendation - We recommend that the Authority strengthen their internal controls to ensure that all units under HAP contract meet HQS. Further, we recommend that the Authority immediately reinspect all units that failed their most recent HQS unit inspection, within the current regulations allowed by HUD during the COVID-19 pandemic. Authority Response - In April 2019 MHA converted from Visual Homes (previous operating system) to Voyager (current operating system). Prior to the conversion we were informed that all data would transfer to the new system as the owner for both platforms were the same. Following the conversion it was discovered that inspection results were not transferred to Voyager and MHA had to manually input inspection results for all occupied units. This also meant that holds on Housing Assistance Payments (HAP) due to Housing Quality Standards (HQS) abatements were not carried over and HAP was paid on units that were in a two-time failed status. MHA has been working with owners to recoup monies that should not have been paid and are working with the inspection?s vendor to accurately and promptly abate HAP on failed units and work with the owners to remedy the deficiencies. Our inspection vendor will run a report and audit all the units that resulted in a failed inspections in 2019 to ensure they either subsequently passed or were abated. The contractor will provide a report to management as it is completed.

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