FAC Explorer

Audit 26858

FY End
2022-09-30
Total Expended
$2.27M
Findings
2
Programs
3
Organization: Westerly Housing Authority (RI)
Year: 2022 Accepted: 2023-06-25
Auditor: Marcum LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
30872 2022-001 Material Weakness - N
607314 2022-001 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.66M Yes 1
14.850 Public and Indian Housing $359,765 - 0
14.872 Public Housing Capital Fund $255,555 - 0

Contacts

Name Title Type
J64BJ4MJ7415 Lucienne Andrew Auditee
4015964918 Michael Guyder Auditor
No contacts on file

Notes to SEFA

Accounting Policies: NOTE 1 BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Westerly Housing Authority, under programs of the federal government for the year ended September 30, 2022. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Westerly Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Westerly Housing Authority.NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the schedule are reported on the accrual basis of accounting. For cost-reimbursement awards, 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. For performance-based awards, expenditures reported represent amounts earned. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

Finding 2022-001
2022-001 ? SPECIAL TESTS & PROVISIONS: RENT REASONABLENESS Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.871 ? Housing Voucher Cluster CRITERIA The PHA may not approve a lease until the PHA determines that the initial rent to an owner is a reasonable rent. (2) The PHA must redetermine the reasonable rent: (i) Before any increase in the rent to an owner; (ii) If there is a 10 percent decrease in the published FMR in effect 60 days before the contract anniversary (for the unit size rented by the family) as compared with the FMR in effect 1 year before the contract anniversary. (iii) If directed by HUD. The PHA may also redetermine the reasonable rent at any other time. At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the PHA. (24 CFR 982.507) CONDITION We identified 5 instances in which the Authority was required to perform an assessment to determine if the rent requested by the landlord is reasonable for new admissions. In all five, the Authority did not perform this rent reasonableness assessment. CAUSE The Authority experienced turnover in the administrative department. EFFECT The Authority cannot ensure that HAP payments to landlords were reasonable. QUESTIONED COSTS Likely questioned costs - $4,724. CONTEXT We selected a sample of 20 from a population of 185. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION We recommend the Authority provide training for the performance of reexamination procedures and use a third party to conduct rent reasonableness. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2022-001
2022-001 ? SPECIAL TESTS & PROVISIONS: RENT REASONABLENESS Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.871 ? Housing Voucher Cluster CRITERIA The PHA may not approve a lease until the PHA determines that the initial rent to an owner is a reasonable rent. (2) The PHA must redetermine the reasonable rent: (i) Before any increase in the rent to an owner; (ii) If there is a 10 percent decrease in the published FMR in effect 60 days before the contract anniversary (for the unit size rented by the family) as compared with the FMR in effect 1 year before the contract anniversary. (iii) If directed by HUD. The PHA may also redetermine the reasonable rent at any other time. At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the PHA. (24 CFR 982.507) CONDITION We identified 5 instances in which the Authority was required to perform an assessment to determine if the rent requested by the landlord is reasonable for new admissions. In all five, the Authority did not perform this rent reasonableness assessment. CAUSE The Authority experienced turnover in the administrative department. EFFECT The Authority cannot ensure that HAP payments to landlords were reasonable. QUESTIONED COSTS Likely questioned costs - $4,724. CONTEXT We selected a sample of 20 from a population of 185. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION We recommend the Authority provide training for the performance of reexamination procedures and use a third party to conduct rent reasonableness. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.