Audit 23389

FY End
2022-06-30
Total Expended
$22.89M
Findings
2
Programs
7
Year: 2022 Accepted: 2022-11-08

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
21259 2022-001 Significant Deficiency - E
597701 2022-001 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $15.61M Yes 1
14.850 Public and Indian Housing $3.81M Yes 0
14.872 Public Housing Capital Fund $2.99M Yes 0
14.871 Ehv - Section 8 Housing Choice Vouchers $200,618 Yes 0
14.182 Section 8 New Construction and Substantial Rehabilitation $117,814 - 0
10.427 Rural Rental Assistance Payments $92,022 - 0
14.896 Family Self-Sufficiency Program $62,185 - 0

Contacts

Name Title Type
JQ4BJKP5NBD3 Nancy M. Schmidt Auditee
6182773290 Dale R. Rector Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. RURAL RENTAL ASSISTANCE PAYMENTS (10.427) - Balances outstanding at the end of the audit period were 43384.
Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. 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 (the Schedule) includes the federal award activity of the Authority under programs of the federal government for the year ended June 30, 2022. The information in this 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 the operations of the Authority, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Authority.
Title: SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Authority provided no federal awards to subrecipients during the fiscal year ending June 30, 2022.
Title: DISCLOSURE OF OTHER FORMS OF ASSISTANCE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. ?The St. Clair County Housing Authority received no federal awards of non-monetary assistance that are required to be disclosed for the year ended June 30, 2022.?The St. Clair County Housing Authority had loans outstanding of $43,384, which were guaranteed, and therefore, qualify as part of the federal financial assistance. This loan is disclosed in the Notes to the Financial Statements.?The St. Clair County Housing Authority maintains the following limits of insurance as of June 30, 2022:Property$ 25,000,000Liability$ 5,000,000Commercial Auto$ 2,000,000Worker Compensation StatutoryPublic Officials Liability$ 5,000,000Employee Dishonesty$ 300,000Settled claims have not exceeded the above commercial insurance coverage limits over the past three years.

Finding Details

Finding 2022-001 ? Housing Choice Voucher Tenant Files ? Eligibility ? Internal Control over Tenant Files ? Noncompliance and Significant Deficiency Housing Choice Voucher Program CFDA #14.871 Criteria: The Code of Federal regulations, the Housing Authority?s Administrative plan, and specific HUD guidelines in documenting and maintaining the Housing Choice Voucher tenant files. Condition & Cause: Our Review of one hundred (100) HCV tenant files revealed that there were nine (9) errors of noncompliance noted during the audit. This represents a 9.00% sample deviation rate across the total population. The errors consisted of failure to calculate tenant income correctly, failure to have a third party verify tenant income correctly, and improper year-to-date analyses. All nine (9) errors were income related. During the audit, it was noted that the Authority experienced a significant amount of turnover in the HCV department. Additionally, COVID-19 made it difficult to find and retain new staff. Recommendation: We recommend that the Agency conduct a thorough tenant file audit of existing tenants in the HCV program to determine whether there are any misstatements of rental income. We also recommend that the Agency increase their monitoring and review of the HCV program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.
Finding 2022-001 ? Housing Choice Voucher Tenant Files ? Eligibility ? Internal Control over Tenant Files ? Noncompliance and Significant Deficiency Housing Choice Voucher Program CFDA #14.871 Criteria: The Code of Federal regulations, the Housing Authority?s Administrative plan, and specific HUD guidelines in documenting and maintaining the Housing Choice Voucher tenant files. Condition & Cause: Our Review of one hundred (100) HCV tenant files revealed that there were nine (9) errors of noncompliance noted during the audit. This represents a 9.00% sample deviation rate across the total population. The errors consisted of failure to calculate tenant income correctly, failure to have a third party verify tenant income correctly, and improper year-to-date analyses. All nine (9) errors were income related. During the audit, it was noted that the Authority experienced a significant amount of turnover in the HCV department. Additionally, COVID-19 made it difficult to find and retain new staff. Recommendation: We recommend that the Agency conduct a thorough tenant file audit of existing tenants in the HCV program to determine whether there are any misstatements of rental income. We also recommend that the Agency increase their monitoring and review of the HCV program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.