Housing Authority of the City of Waco, Texas

Condition: During inquiry and review we selected 50 tenant files for testing. Significant deficiencies were noted after 27 files had been reviewed; therefore, we discontinued testing and issued this finding. Of the 27 files we reviewed there were only three files that had no exceptions. The twenty-four files had multiple discrepancies. Six of the files were late recerts which is 24% of the test recert population. Five files had no support with two being a part of the late recerts previously noted. There were nine files were the EIV reports were not found. There were 14 files where the UA calculation was either not found or did not agree with what was reported on the 50058. Five of the files used the wrong payment standard. The above discrepancies all affect HAP. We tested three admissions with two of the files having no exceptions. The one file with discrepancies included income not being verified for two of the three adults living in the household. The rent was not reasonable and was not signed. The UA calculation was incorrect. We tested one EOP with no exception which is noted in the June 24, 2025 audit report. Due to the timing of this finding and the shier size of the program for FYE September 30, 2025 tenant file testing noted a material weakness in compliance.

View of Responsible Officials and Planned Corrective Action: We acknowledge the failure of the Authority to maintain appropriate tenant files. In January of 2025 we created an internal compliance department and started discovering we had a compliance problem. In March we had AMA Consulting Group start the process of identifying the problem and their report is dated March 13, 2025. We are currently working to ensure all files are accurate and have developed a four phase corrective action process that we have implemented. The corrective action is working and we anticipate completion by September 30, 2026.

Finding 2025-001

ALN Number: 14.871

Name of Federal Agency: U.S. Department of Housing & Urban Development

Type of Finding – Single Audit Material Weakness Compliance Finding

Criteria: The Authority is required to implement and maintain a system of internal controls that allows the Authority to ensure accurate tenant files with updated rents, leases, 50058s, income verification, tenant identification, background checks and other similar items to assure proper HAPs, UA’s and tenant rents per the ACC.

Cause and Effect: The Authority failed to maintain a system of controls in which tenant files are properly documented and maintained. Because of the lack of controls the Housing Authority is not in compliance with HUD regulations.

Recommendation: The Housing Authority should continue with the new system of controls that includes personnel accountability and processes that is leading to timely and accurate recertifications, HAP calculations, and family rent calculations.

Responsible Official: Milet Hopping, CEO

Finding 2025-002

ALN Number: 14.871

Name of Federal Agency: U.S. Department of Housing & Urban Development

Type of Finding – Single Audit Material Weakness Compliance Finding

Cause: The Authority did not have adequate internal controls to ensure that SEMAP indicator data were properly supported, reviewed, and retained. Management indicated that staff turnover and inconsistent quality control procedures contributed to incomplete documentation.

Effect: Because the Authority did not maintain adequate support for its SEMAP the Authority was designated troubled and received an on-site review by the San Antonio HUD Field Office on April 13-16 as required by HUD.

Recommendation: We recommend that the Authority to continue to work with the Field Office to strengthen internal controls over SEMAP reporting by implementing formal review procedures, ensuring complete and accurate documentation is maintained for each SEMAP indicator, and establishing monitoring processes to ensure timely correction of any SEMAP deficiencies identified by HUD.

View of Responsible Officials and Planned Corrective Action: We acknowledge the failure of the Authority we hired a new HCV Program Director and they are working with the Field Office with a goal of the 2026 SEMAP score getting us out of trouble designation.

Responsible Official: Milet Hopping, CEO

Criteria: HUD regulations at 24 CFR Part 985 establish SEMAP as the performance assessment system for PHAs administering the HCV Program. PHAs must accurately certify their performance on each SEMAP indicator and maintain documentation supporting each indicator rating.

Finding 2024-001

ALN Number: 14.871

Name of Federal Agency: U.S. Department of Housing & Urban Development

Type of Finding – Single Audit Material Weakness Compliance Finding

Criteria: The Authority is required to implement and maintain a system of internal controls that allows the Authority to ensure accurate tenant files with updated rents, leases, 50058s, income verification, tenant identification, background checks and other similar items to assure proper HAPs, UA’s and tenant rents per the ACC.

Cause and Effect: The Authority failed to maintain a system of controls in which tenant files are properly documented and maintained. Because of the lack of controls the Housing Authority is not in compliance with HUD regulations.

Recommendation: The Housing Authority should implement a system of controls that includes personnel accountability and processes that lead to timely and accurate recertifications, HAP calculations, and family rent calculations. The Authority should continue working with AMA Consulting Group to implement a sustainable control process.

View of Responsible Officials and Planned Corrective Action: We acknowledge the failure of the Authority to maintain appropriate tenant files. In January of 2025 we created an internal compliance department and started discovering we had a compliance problem. In March we had AMA Consulting Group start the process of identifying the problem and their report is dated March 13, 2025. We are currently working with AMA Consulting Group to ensure all files are accurate and have developed a four phase corrective action process that we have implemented.

Responsible Official: Milet Hopping, CEO

Condition: During inquiry and review we selected 50 tenant files for testing. Significant deficiencies were noted after 27 files had been reviewed; therefore, we discontinued testing and issued this finding. Of the 27 files we reviewed there were only three files that had no exceptions. The twenty-four files had multiple discrepancies. Six of the files were late recerts which is 24% of the test recert population. Five files had no support with two being a part of the late recerts previously noted. There were nine files were the EIV reports were not found. There were 14 files where the UA calculation was either not found or did not agree with what was reported on the 50058. Five of the files used the wrong payment standard. The above discrepancies all affect HAP. We tested three admissions with two of the files having no exceptions. The one file with discrepancies included income not being verified for two of the three adults living in the household. The rent was not reasonable and was not signed. The UA calculation was incorrect. We tested one EOP with no exception.