FAC Explorer

Audit 12169

FY End
2023-06-30
Total Expended
$3.87M
Findings
2
Programs
3
Organization: Lexington Housing Authority (NC)
Year: 2023 Accepted: 2024-01-18
Auditor: Smith Marion & CO

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
8892 2023-001 Significant Deficiency - N
585334 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $3.72M Yes 1
14.241 Housing Opportunities for Persons with Aids $100,623 - 0
14.896 Family Self-Sufficiency Program $52,051 - 0

Contacts

Name Title Type
X4K1RL4N2778 Avis Robinson Auditee
3362498936 Chad Porter Auditor
No contacts on file

Notes to SEFA

Title: Scope of Presentation Accounting Policies: The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, section 414. The accompanying schedule presents the expenditures incurred (and related awards received) by the Lexington Housing Authority (the Authority), that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blend or discretely present component units have been included.

Finding Details

Finding 2023-001
Criteria: Federal regulations (24 CFR section 982.404) states a Public Housing Agency (PHA) must verify that an owner has corrected any life threatening issue found during a Housing Quality Standard (HQS) inspection within no more than 24 hours. For other defects, the PHA must verify the owner corrected the defect within no more than 30 calendar days (or any PHA approved extension). The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner correct the defect with in the period specified by the PHA and the PHA verifies the corrections.Condition: We noted that the PHA identified defects during annual HQS inspections which require corrective action within 30 calendar days following the discovery of such conditions. However, the PHA was unable to provide documentation that it reinspected the dwelling residences to confirm corrective action had taken place within the correct corrective period. Context: During our testing, we noted that 4 out of 18 failed inspections reviewed did not receive a reinspection with 24 hours or 30 days. With 181 total failed inspections, the extrapolated error amount would be 40 inspections. Cause: The Authority failed to properly monitor the HQS process to ensure the PHA's reinspection policies were being followed.Effect: The Authority is non-compliant with the federal regulations over this federal program, this could potentially result in significant operating and financial penalties. Recommendations: We suggest the Authority structure a system capable of properly overseeing compliance with regulations relative to these grants as well as maintaining more accurate and complete documentation of adherence to compliance. Management Views: Management Agrees; See Management's Corrective Action Plan.
Finding 2023-001
Criteria: Federal regulations (24 CFR section 982.404) states a Public Housing Agency (PHA) must verify that an owner has corrected any life threatening issue found during a Housing Quality Standard (HQS) inspection within no more than 24 hours. For other defects, the PHA must verify the owner corrected the defect within no more than 30 calendar days (or any PHA approved extension). The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner correct the defect with in the period specified by the PHA and the PHA verifies the corrections.Condition: We noted that the PHA identified defects during annual HQS inspections which require corrective action within 30 calendar days following the discovery of such conditions. However, the PHA was unable to provide documentation that it reinspected the dwelling residences to confirm corrective action had taken place within the correct corrective period. Context: During our testing, we noted that 4 out of 18 failed inspections reviewed did not receive a reinspection with 24 hours or 30 days. With 181 total failed inspections, the extrapolated error amount would be 40 inspections. Cause: The Authority failed to properly monitor the HQS process to ensure the PHA's reinspection policies were being followed.Effect: The Authority is non-compliant with the federal regulations over this federal program, this could potentially result in significant operating and financial penalties. Recommendations: We suggest the Authority structure a system capable of properly overseeing compliance with regulations relative to these grants as well as maintaining more accurate and complete documentation of adherence to compliance. Management Views: Management Agrees; See Management's Corrective Action Plan.