Audit 24037

2022-004 ? Noncompliance and Internal Controls over Compliance for Special Tests and Provisions Identification data: U.S. Department of Agriculture ? Rural Rental Housing Loan, Assistance Listing No. 10.415. Criteria: The Authority?s agreements with the U.S. Department of Agriculture ? Rural Rental Housing Loan program require the Authority to deposit $24,223 to the reserve account annually until the total reaches $288,000. Condition: The Authority made deposits to the reserve account totaling $21,050 during the year and the reserve balance was under the $288,000. The deposits did not meet the total required by the agreement. Cause: A breakdown in the Authority?s internal controls over special tests and provisions did not allow the Authority to meet the reporting requirements under the award agreements. Effect or potential effect: The control deficiency is a significant deficiency that prevented the Authority from complying with the special tests and provisions requirements of the award agreements. Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2021-005. Recommendation: The Milford Housing Authority should review its system of internal control over special tests and provisions to determine improvements that can be made to ensure the Authority actively tracks and adheres to reserve requirements outlined in its award agreements. Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority will evaluate its system of internal control over special tests and provisions to determine how the Authority can better monitor and comply with reserve requirements of its award agreement.

2022-005 ? Internal Controls over Compliance for Allowable Costs Identification data: U.S. Department of Agriculture ? Rural Rental Housing Loan, Assistance Listing No. 10.415. Criteria: 2 CFR ?200.303 requires the Authority to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Authority is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the Authority?s accounting policies and procedures for accounts payable requires that all invoices, attachments, and approvals be reviewed for completeness and accuracy of accounting coding before the payment is authorized. The Organization did not maintain a system of internal control over disbursements paid by ACH, including those claimed under the Federal awards, with sufficient detail to provide for the review and approval of the ACH disbursements at an individual level prior to payment. Condition: The Authority did not maintain a system of internal control to provide for the detailed review and approval of costs, including those claimed under the Federal awards. Cause: A breakdown in the Authority?s internal controls over expenses did not allow the Authority to sufficiently evidence review and approval of costs, including those claimed under the Federal awards. Effect or potential effect: The control deficiency is a significant deficiency that may have caused the Authority to pay unauthorized, invalid, or unallowable costs, including those claimed under Federal awards. Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2021-006. Recommendation: The Milford Housing Authority should review its system of internal control over expenses to determine improvements that can be made to ensure the Authority appropriately reviews and approves at a detailed level prior to payment. The Authority should also incorporate a procedure to evidence the review and approval of the responsible individual. Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority understands the need to review and approve disbursements and has implemented procedures to provide for the review and approval of all invoices at a detailed level which will be evidenced by an initial or other documentation.

2022-004 ? Noncompliance and Internal Controls over Compliance for Special Tests and Provisions Identification data: U.S. Department of Agriculture ? Rural Rental Housing Loan, Assistance Listing No. 10.415. Criteria: The Authority?s agreements with the U.S. Department of Agriculture ? Rural Rental Housing Loan program require the Authority to deposit $24,223 to the reserve account annually until the total reaches $288,000. Condition: The Authority made deposits to the reserve account totaling $21,050 during the year and the reserve balance was under the $288,000. The deposits did not meet the total required by the agreement. Cause: A breakdown in the Authority?s internal controls over special tests and provisions did not allow the Authority to meet the reporting requirements under the award agreements. Effect or potential effect: The control deficiency is a significant deficiency that prevented the Authority from complying with the special tests and provisions requirements of the award agreements. Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2021-005. Recommendation: The Milford Housing Authority should review its system of internal control over special tests and provisions to determine improvements that can be made to ensure the Authority actively tracks and adheres to reserve requirements outlined in its award agreements. Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority will evaluate its system of internal control over special tests and provisions to determine how the Authority can better monitor and comply with reserve requirements of its award agreement.

2022-005 ? Internal Controls over Compliance for Allowable Costs Identification data: U.S. Department of Agriculture ? Rural Rental Housing Loan, Assistance Listing No. 10.415. Criteria: 2 CFR ?200.303 requires the Authority to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Authority is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the Authority?s accounting policies and procedures for accounts payable requires that all invoices, attachments, and approvals be reviewed for completeness and accuracy of accounting coding before the payment is authorized. The Organization did not maintain a system of internal control over disbursements paid by ACH, including those claimed under the Federal awards, with sufficient detail to provide for the review and approval of the ACH disbursements at an individual level prior to payment. Condition: The Authority did not maintain a system of internal control to provide for the detailed review and approval of costs, including those claimed under the Federal awards. Cause: A breakdown in the Authority?s internal controls over expenses did not allow the Authority to sufficiently evidence review and approval of costs, including those claimed under the Federal awards. Effect or potential effect: The control deficiency is a significant deficiency that may have caused the Authority to pay unauthorized, invalid, or unallowable costs, including those claimed under Federal awards. Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2021-006. Recommendation: The Milford Housing Authority should review its system of internal control over expenses to determine improvements that can be made to ensure the Authority appropriately reviews and approves at a detailed level prior to payment. The Authority should also incorporate a procedure to evidence the review and approval of the responsible individual. Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority understands the need to review and approve disbursements and has implemented procedures to provide for the review and approval of all invoices at a detailed level which will be evidenced by an initial or other documentation.