Audit 19208

FY End
2022-12-31
Total Expended
$1.47M
Findings
14
Programs
4
Year: 2022 Accepted: 2023-09-06
Auditor: Abdo LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
20393 2022-002 - - P
20394 2022-003 - - N
20395 2022-002 - - P
20396 2022-003 - - N
20397 2022-002 - - P
20398 2022-004 - - N
20399 2022-004 - - N
596835 2022-002 - - P
596836 2022-003 - - N
596837 2022-002 - - P
596838 2022-003 - - N
596839 2022-002 - - P
596840 2022-004 - - N
596841 2022-004 - - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.07M Yes 3
14.850 Public and Indian Housing $226,431 Yes 1
14.872 Public Housing Capital Fund $127,537 - 0
14.871 Section 8 Emergency Housing Choice Vouchers $41,901 Yes 3

Contacts

Name Title Type
ZLKXCX3FD649 Randy Thompson Auditee
5073766788 Thomas Olinger Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on this schedule are reported on the modified accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Worthington Housing Redevelopment Authority (the HRA), Worthington, Minnesota for the year ended December 31, 2022. The HRA's reporting entity is defined in Note 1A to the HRA's financial statements. The information in this schedule is presented in accordance with the requirement of the Uniform Guidance, Audits of States, Local Governments, and Non-Profit Organizations. All Federal awards received directly from Federal agencies as well as Federal awards passed through other government agencies are included on the schedule.
Title: Pass-through Entity Identifying Numbers Accounting Policies: Expenditures reported on this schedule are reported on the modified accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Pass-through entity identifying numbers, if any, are presented where available.
Title: Subrecipients Accounting Policies: Expenditures reported on this schedule are reported on the modified accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. No federal expenditures presented in this schedule were provided to subrecipients.

Finding Details

Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not have depository agreements with the banks. Criteria: Code of Federal Regulations ? 982.156 requires depository agreements to be deposited with a financial institution selected as depositary by the PHA in accordance with HUD requirements. Cause: The HRA did not have all necessary forms for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management complete the necessary forms with the bank to ensure compliance. Management Response: The HRA?s management will complete the depository agreement forms with the bank.
Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not have depository agreements with the banks. Criteria: Code of Federal Regulations ? 982.156 requires depository agreements to be deposited with a financial institution selected as depositary by the PHA in accordance with HUD requirements. Cause: The HRA did not have all necessary forms for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management complete the necessary forms with the bank to ensure compliance. Management Response: The HRA?s management will complete the depository agreement forms with the bank.
Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not perform a re-inspection of a failed inspection. Criteria: Code of Federal Regulations ? 982.405 requires all failed inspections to be re-inspected. Cause: The HRA did not have adequate internal controls over inspections for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management have controls in place to ensure all failed inspections are re-inspected. Management Response: The HRA?s management will ensure all failed inspections are re-inspected in the future.
Condition: During the audit we noted the HRA did not perform a re-inspection of a failed inspection. Criteria: Code of Federal Regulations ? 982.405 requires all failed inspections to be re-inspected. Cause: The HRA did not have adequate internal controls over inspections for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management have controls in place to ensure all failed inspections are re-inspected. Management Response: The HRA?s management will ensure all failed inspections are re-inspected in the future.
Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not have depository agreements with the banks. Criteria: Code of Federal Regulations ? 982.156 requires depository agreements to be deposited with a financial institution selected as depositary by the PHA in accordance with HUD requirements. Cause: The HRA did not have all necessary forms for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management complete the necessary forms with the bank to ensure compliance. Management Response: The HRA?s management will complete the depository agreement forms with the bank.
Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not have depository agreements with the banks. Criteria: Code of Federal Regulations ? 982.156 requires depository agreements to be deposited with a financial institution selected as depositary by the PHA in accordance with HUD requirements. Cause: The HRA did not have all necessary forms for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management complete the necessary forms with the bank to ensure compliance. Management Response: The HRA?s management will complete the depository agreement forms with the bank.
Condition: During the audit we noted the HRA did not get Board approval for several Section 8 Housing Voucher and Public and Indian claims. Criteria: Minnesota Statute ? 412.271, subd. 1 directs all claims be audited and allowed by the HRA Board. Meaning all claims paid by the HRA are required to be approved by the Board at the HRA?s monthly meetings. The HRA also relies on Board approval of expenditures as a key control over federal spending. We noted instances throughout the year where there were gaps in the check sequences that the HRA was approving, thereby not approving all claims. Cause: Section 8 Housing Voucher and Public and Indian claims were not included in monthly Board meetings for approval. Effect: The HRA is not in compliance with Minnesota legal compliance and there were not proper internal controls over federal expenditures. Recommendation: We recommend the HRA include all claims paid by the HRA in monthly Board meetings for approval. Management Response: The HRA?s management will include all claims paid by the HRA in monthly Board meetings.
Condition: During the audit we noted the HRA did not perform a re-inspection of a failed inspection. Criteria: Code of Federal Regulations ? 982.405 requires all failed inspections to be re-inspected. Cause: The HRA did not have adequate internal controls over inspections for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management have controls in place to ensure all failed inspections are re-inspected. Management Response: The HRA?s management will ensure all failed inspections are re-inspected in the future.
Condition: During the audit we noted the HRA did not perform a re-inspection of a failed inspection. Criteria: Code of Federal Regulations ? 982.405 requires all failed inspections to be re-inspected. Cause: The HRA did not have adequate internal controls over inspections for single audit compliance. Effect: The HRA is not in compliance with Federal Award Programs. Recommendation: We recommend the HRA management have controls in place to ensure all failed inspections are re-inspected. Management Response: The HRA?s management will ensure all failed inspections are re-inspected in the future.