Audit 20049

Finding 2022-002: Internal Control Structure Housing Choice Voucher, 14.871 Material Weakness ? Eligibility, Reporting and Special Tests and Provisions Repeat Finding 2021-002 Criteria: The Agency is responsible for establishing an effective internal control process to ensure the Agency complies with the requirements governing the Housing Choice Voucher program. Condition: The Agency has limited employees which makes it difficult for the Agency to have controls beyond the Executive Director's knowledge. As a result, we noted the following deficiencies related to the internal control components which are considered a material weakness: ? Control Activities ? The Agency only had the one staff so the Agency has no controls over compliance beyond the Executive Director's knowledge. ? Information and Communication ? Communication involves providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting The Agency had not formally documented the procedures as a reference point for employees to perform their duties. Further, internal control procedures should be documented so that the controls in place can be monitored. Cause: The Agency has limited resources and one staff. Effect or Potential Effect: The control deficiencies are deficiencies that result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected Recommendation: As noted above, the Agency has limited resources and additional controls are not financially feasible in the hiring of additional staff. In addition, the Board of Commissioners is considered a governing Board and the Board performing management or day-to-day activities is not recommended based on our previous experience and is not intended to be a solution to this situation. The Agency is a small entity and the lack of segregation of duties is common among entities with minimal employees and should be recognized as such. However, it is not our intent to establish internal controls as the Agency's Board should make the final determination in the cost versus benefit. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding but can not reasonably adopt internal control procedures to correct the material weakness.

Finding 2022-003: Deposit Collateralization Material Weakness/Noncompliance Housing Choice Voucher Program ? 14.871 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: The Agency opened up new bank accounts during the year and did not obtain the required depository agreement. Cause: The Agency was unaware of the requirement. Effect or Potential Effect: The Agency was in noncompliance with HUD?s requirement to have proper depository agreements. Recommendation: The Agency should contact its financial institutions and provide them with the appropriate depository agreement to be signed. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

Finding 2022-002: Internal Control Structure Housing Choice Voucher, 14.871 Material Weakness ? Eligibility, Reporting and Special Tests and Provisions Repeat Finding 2021-002 Criteria: The Agency is responsible for establishing an effective internal control process to ensure the Agency complies with the requirements governing the Housing Choice Voucher program. Condition: The Agency has limited employees which makes it difficult for the Agency to have controls beyond the Executive Director's knowledge. As a result, we noted the following deficiencies related to the internal control components which are considered a material weakness: ? Control Activities ? The Agency only had the one staff so the Agency has no controls over compliance beyond the Executive Director's knowledge. ? Information and Communication ? Communication involves providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting The Agency had not formally documented the procedures as a reference point for employees to perform their duties. Further, internal control procedures should be documented so that the controls in place can be monitored. Cause: The Agency has limited resources and one staff. Effect or Potential Effect: The control deficiencies are deficiencies that result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected Recommendation: As noted above, the Agency has limited resources and additional controls are not financially feasible in the hiring of additional staff. In addition, the Board of Commissioners is considered a governing Board and the Board performing management or day-to-day activities is not recommended based on our previous experience and is not intended to be a solution to this situation. The Agency is a small entity and the lack of segregation of duties is common among entities with minimal employees and should be recognized as such. However, it is not our intent to establish internal controls as the Agency's Board should make the final determination in the cost versus benefit. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding but can not reasonably adopt internal control procedures to correct the material weakness.

Finding 2022-003: Deposit Collateralization Material Weakness/Noncompliance Housing Choice Voucher Program ? 14.871 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: The Agency opened up new bank accounts during the year and did not obtain the required depository agreement. Cause: The Agency was unaware of the requirement. Effect or Potential Effect: The Agency was in noncompliance with HUD?s requirement to have proper depository agreements. Recommendation: The Agency should contact its financial institutions and provide them with the appropriate depository agreement to be signed. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.