FORT WORTH HOUSING SOLUTIONS

2024 – 001 Federal Agency U.S. Department of the Treasury U.S. Department of Housing and Urban Development Federal Program Title Coronavirus State and Local Fiscal Recovery Funds Community Development Block Grants/Entitlement Grants Assistance Listing Number 21.027 14.218 Award Period January 1, 2024, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR part 200.303 require that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Internal Control-Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission, provides a framework for organizations to design, implement, and evaluate control that will facilitate compliance with the requirements of Federal laws, regulations, and program compliance requirements. 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the CFDA title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Controller General of the United State and the "Internal Control Integrated Framework", issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Authority’s schedule of expenditures of federal awards (SEFA) did not include the expenditures related to the Coronavirus State and Local Fiscal Recovery Funds and the expenditures related to the Community Development Block Grants on the SEFA as required by Uniform Guidance for federal program 14.218. . Questioned costs: None

Context: During the review of revenue for these federal grants, it was discovered and determined that they were not reported on the SEFA. Cause: The Agency was not aware of the requirements to include these expenditures on the SEFA. Effect: The Authority was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a). The Agencies’ programs’ expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Repeat Finding: No Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: US Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program Assistance Listing Number: 14.871 Award Period: January 1, 2024, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the HUD Compliance Supplement, "The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary." Condition: The Authority did not have adequate internal controls designed to ensure that the rent reasonableness was completed/approved prior to the rent effective date. Questioned costs: None Context: During our testing, 2 of 29 sampled tenant files did not have their rent reasonableness determination completed/approved prior to the rent effective date. Cause: The Authority did not have proper internal controls to ensure that rent reasonableness determinations were completed in a timely manner. Effect: The Authority is not in compliance with the program’s requirements of reasonable rent. Repeat Finding: No Recommendation: We recommend that the Authority implement processes to ensure that rent reasonableness determinations are completed on time. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: US Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program Assistance Listing Number: 14.871

Award Period: January 1, 2024, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the HUD Compliance Supplement, "The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). However, NSPIRE for HCV and PBV programs, referred to as NSPIRE-V during HUD’s demonstration, was effective October 1, 2023, and replaced Housing Quality Standards (HQS), as previously defined in 24 CFR 982.401, as the inspection standards for these programs." Condition: The Authority did not have adequate internal controls designed to ensure that the biennial inspection was completed in a timely manner. Questioned costs: None Context: During our testing, 1 of 29 sampled tenant files did not have their inspection completed within the required biennial timeframe. Cause: The Authority did not have adequate internal controls to ensure all inspections were completed within the correct timeframe. Effect: The Authority is not in compliance with the program requirements of the housing quality inspections standards. Repeat Finding: No Recommendation: We recommend that the Authority implement processes to ensure that inspections are completed on time. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 001

Federal Agency: US Department of Housing and Urban Development

Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds

Assistance Listing Number: 21.027

Award Period: January 1, 2023 through December 31, 2023

Type of Finding: Significant Deficiency in Internal Control over Compliance

Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Controller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO).

Condition: The Authority’s schedule of expenditures of federal awards (SEFA) did not include the expenditures related to the Coronavirus State and Local Fiscal Recovery Funds on the SEFA as required by Uniform Guidance for federal program 21.027.

Questioned costs: None

Context: During the review of revenue, this federal grant discovered and determined it was not reported on the SEFA.

Cause: The Agency was not aware of the requirements to include these expenditures on the SEFA.

Effect: The Authority was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a). The Agency’s program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA.

Repeat Finding: No Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance.

Views of responsible officials: There is no disagreement with the audit finding.