Audit 11330

FY End
2023-06-30
Total Expended
$11.17M
Findings
2
Programs
9
Year: 2023 Accepted: 2024-01-12

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
8417 2023-001 Significant Deficiency - N
584859 2023-001 Significant Deficiency - N

Programs

Contacts

Name Title Type
E74RNLLCC8Y5 Debra Stephenson Auditee
1360535617 Rich Larsen Auditor
No contacts on file

Notes to SEFA

Title: SELF-HELP HOMEOWNERSHIP OPPORTUNITY PROGRAM (MORTGAGE) Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the Authority under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of operations of the Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of the Authority. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. The Self-Help Homeownership Opportunity Program (Mortgage) listed subsequently is administered by the U.S. Department of Housing and Urban Development, and balance and transactions relating to the program are included in the Authority's basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at June 30, 2023 consisted of 14.247 Self-Help Homeownership Opportunity Program (Mortgage) $846,024.
Title: RURAL RENTAL HOUSING LOANS PROGRAM Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the Authority under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of operations of the Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of the Authority. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. The Rural Rental Housing Loans Program (Mortgage) listed subsequently is administered by the U.S. Department of Agriculture, and balance and transactions relating to the program are included in the Authority's basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at June 30, 2023 consisted of 10.415 Rural Rental Housing Loans Program (Mortgage) $2,299,646.

Finding Details

Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing 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 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)). Condition: Based upon inspection of the Authority’s files and on discussion with management, there was a unit that was not reinspected within the biennial reinspection period of two (2) years. Context: There are approximately 353 Section 8 Housing Choice Vouchers units. Of a sample size of fifteen (15) files, one (1) biennial inspection was not completed in a timely manner. Our sample size is statistically valid. Known Questioned Costs: $934 Cause: The Authority's contract administrator for the Section 8 Housing Choice Vouchers Program was unable to complete the inspection in a timely basis due to lack of manpower. 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 a corrective action plan that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has an interlocal agreement with a neighboring housing authority for administration of the Section 8 Housing Choice Vouchers Program. The authority understands the reason for the finding, in that the inspection was one month late. Previously a quality control sample of Section 8 Housing Choice Voucher files administered by the neighboring Housing Authority had been reviewed each month. This was with respect to the income calculation, specifically. Housing Kitsap will add a verification of inspection requirements to this process.
Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing 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 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)). Condition: Based upon inspection of the Authority’s files and on discussion with management, there was a unit that was not reinspected within the biennial reinspection period of two (2) years. Context: There are approximately 353 Section 8 Housing Choice Vouchers units. Of a sample size of fifteen (15) files, one (1) biennial inspection was not completed in a timely manner. Our sample size is statistically valid. Known Questioned Costs: $934 Cause: The Authority's contract administrator for the Section 8 Housing Choice Vouchers Program was unable to complete the inspection in a timely basis due to lack of manpower. 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 a corrective action plan that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has an interlocal agreement with a neighboring housing authority for administration of the Section 8 Housing Choice Vouchers Program. The authority understands the reason for the finding, in that the inspection was one month late. Previously a quality control sample of Section 8 Housing Choice Voucher files administered by the neighboring Housing Authority had been reviewed each month. This was with respect to the income calculation, specifically. Housing Kitsap will add a verification of inspection requirements to this process.