FAC Explorer

Audit 295560

FY End
2023-06-30
Total Expended
$7.39M
Findings
6
Programs
5
Organization: Housing Authority of the County of Jackson (IL)
Year: 2023 Accepted: 2024-03-18
Auditor: Marcum LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
380874 2023-002 Material Weakness Yes I
380875 2023-003 Significant Deficiency Yes N
380876 2023-002 Material Weakness Yes I
957316 2023-002 Material Weakness Yes I
957317 2023-003 Significant Deficiency Yes N
957318 2023-002 Material Weakness Yes I

Programs

ALN Program Spent Major Findings
14.872 Public Housing Capital Fund $2.63M Yes 1
14.850 Public and Indian Housing $2.45M Yes 2
14.871 Section 8 Housing Choice Vouchers $101,088 - 0
14.879 Mainstream Vouchers $76,970 - 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $64,032 - 0

Contacts

Name Title Type
F9MQS9Q952B8 Brigitta Mac-Rizzo Auditee
6186843183 Michael Guyder Auditor
No contacts on file

Notes to SEFA

Accounting Policies: NOTE 1 – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Housing Authority of Jackson County, under programs of the federal government for the year ended June 30, 2023. 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 Housing Authority of Jackson County, it is not intended to and does not present the financial position, changes in net position or cash flows of Housing Authority of Jackson County. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures 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: NOTE 3 – INDIRECT COST RATE The Housing Authority of Jackson County has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-002
2023-002 – PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program ALN #: 14.872 – Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2023. As a result of our procedures, we identified the following deviations from the Authority’s policy: > Eight instances in which the Authority did not document an Independent Cost Estimate > Two instances in which a bid solicitation/advertisement could not be located. > Two instances in which the Authority did not appear to use the correct procurement methodology. > Eight instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS None identified. CONTEXT All procurements must be made in accordance with the Authority’s procurement policy. We selected a sample of ten procurements representing total expenditures of $653,196. This was not a statistically valid sample. REPEAT FINDING See finding 2022-003 RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: > Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. > Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority’s procurement policy are accounted for in each procurement action. > Provide sufficient procurement training to all employees responsible for procurement.
Finding 2023-003
2023-003 – SPECIAL TESTS & PROVISIONS: DEPOSITORY AGREEMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program CRITERIA PHAs are required to enter into General Depository Agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form as required by HUD in the ACC. The agreements serve as safe guards for federal funds and provide third party rights to HUD (Section 9 of the ACC). CONDITION The Authority has no active depository agreements with any financial institutions with which federal funds are deposited. CAUSE The Authority’s treasury controls did not account for the need for depository agreements. EFFECT The Authority’s federal funds are not adequately safeguarded. QUESTIONED COSTS None identified. CONTEXT The Authority deposits federal funds with several different financial institutions; however, none have an executed depository agreement. REPEAT FINDING See finding 2022-006. RECOMMENDATION We recommend that the Authority execute depository agreements with all financial institutions as soon as possible.
Finding 2023-002
2023-002 – PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program ALN #: 14.872 – Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2023. As a result of our procedures, we identified the following deviations from the Authority’s policy: > Eight instances in which the Authority did not document an Independent Cost Estimate > Two instances in which a bid solicitation/advertisement could not be located. > Two instances in which the Authority did not appear to use the correct procurement methodology. > Eight instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS None identified. CONTEXT All procurements must be made in accordance with the Authority’s procurement policy. We selected a sample of ten procurements representing total expenditures of $653,196. This was not a statistically valid sample. REPEAT FINDING See finding 2022-003 RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: > Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. > Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority’s procurement policy are accounted for in each procurement action. > Provide sufficient procurement training to all employees responsible for procurement.
Finding 2023-002
2023-002 – PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program ALN #: 14.872 – Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2023. As a result of our procedures, we identified the following deviations from the Authority’s policy: > Eight instances in which the Authority did not document an Independent Cost Estimate > Two instances in which a bid solicitation/advertisement could not be located. > Two instances in which the Authority did not appear to use the correct procurement methodology. > Eight instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS None identified. CONTEXT All procurements must be made in accordance with the Authority’s procurement policy. We selected a sample of ten procurements representing total expenditures of $653,196. This was not a statistically valid sample. REPEAT FINDING See finding 2022-003 RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: > Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. > Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority’s procurement policy are accounted for in each procurement action. > Provide sufficient procurement training to all employees responsible for procurement.
Finding 2023-003
2023-003 – SPECIAL TESTS & PROVISIONS: DEPOSITORY AGREEMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program CRITERIA PHAs are required to enter into General Depository Agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form as required by HUD in the ACC. The agreements serve as safe guards for federal funds and provide third party rights to HUD (Section 9 of the ACC). CONDITION The Authority has no active depository agreements with any financial institutions with which federal funds are deposited. CAUSE The Authority’s treasury controls did not account for the need for depository agreements. EFFECT The Authority’s federal funds are not adequately safeguarded. QUESTIONED COSTS None identified. CONTEXT The Authority deposits federal funds with several different financial institutions; however, none have an executed depository agreement. REPEAT FINDING See finding 2022-006. RECOMMENDATION We recommend that the Authority execute depository agreements with all financial institutions as soon as possible.
Finding 2023-002
2023-002 – PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing Program ALN #: 14.872 – Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2023. As a result of our procedures, we identified the following deviations from the Authority’s policy: > Eight instances in which the Authority did not document an Independent Cost Estimate > Two instances in which a bid solicitation/advertisement could not be located. > Two instances in which the Authority did not appear to use the correct procurement methodology. > Eight instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS None identified. CONTEXT All procurements must be made in accordance with the Authority’s procurement policy. We selected a sample of ten procurements representing total expenditures of $653,196. This was not a statistically valid sample. REPEAT FINDING See finding 2022-003 RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: > Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. > Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority’s procurement policy are accounted for in each procurement action. > Provide sufficient procurement training to all employees responsible for procurement.