FAC Explorer

Audit 297612

FY End
2023-06-30
Total Expended
$3.87M
Findings
8
Programs
3
Organization: Pembroke Housing Authority (NC)
Year: 2023 Accepted: 2024-03-26
Auditor: Marcum LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
384503 2023-002 Significant Deficiency - A
384504 2023-003 Significant Deficiency - L
384505 2023-002 Significant Deficiency - A
384506 2023-003 Significant Deficiency - L
960945 2023-002 Significant Deficiency - A
960946 2023-003 Significant Deficiency - L
960947 2023-002 Significant Deficiency - A
960948 2023-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $2.27M Yes 2
14.850 Public and Indian Housing $153,556 - 0
14.872 Public Housing Capital Fund $90,474 - 0

Contacts

Name Title Type
CUQYHEKU9BM3 John McKeown Auditee
7812933088 Michael Guyder Auditor
No contacts on file

Notes to SEFA

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

Finding Details

Finding 2023-002
2023-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 370 instances where a check signature stamp was used and 17 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 770 checks from these 2 accounts of which 387 did not follow their policy regarding authorized check signers. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-003
2023-003 – REPORTING – PERFORMANCE REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure PHA performance in key Section 8 program areas and to assign performance ratings. SEMAP provides procedures for HUD to identify PHA management capabilities and deficiencies in order to target monitoring and program assistance more effectively. PHAs can use the SEMAP performance analysis to assess and improve their own program operations. (24 CFR § 985) CONDITION The Authority was unable to provide sufficient documentation to support the procedures and conclusions of their assessment. CAUSE The Authority did not sufficiently document the procedures and conclusions of their assessment. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None Identified. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a go forward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-002
2023-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 370 instances where a check signature stamp was used and 17 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 770 checks from these 2 accounts of which 387 did not follow their policy regarding authorized check signers. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-003
2023-003 – REPORTING – PERFORMANCE REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure PHA performance in key Section 8 program areas and to assign performance ratings. SEMAP provides procedures for HUD to identify PHA management capabilities and deficiencies in order to target monitoring and program assistance more effectively. PHAs can use the SEMAP performance analysis to assess and improve their own program operations. (24 CFR § 985) CONDITION The Authority was unable to provide sufficient documentation to support the procedures and conclusions of their assessment. CAUSE The Authority did not sufficiently document the procedures and conclusions of their assessment. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None Identified. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a go forward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-002
2023-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 370 instances where a check signature stamp was used and 17 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 770 checks from these 2 accounts of which 387 did not follow their policy regarding authorized check signers. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-003
2023-003 – REPORTING – PERFORMANCE REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure PHA performance in key Section 8 program areas and to assign performance ratings. SEMAP provides procedures for HUD to identify PHA management capabilities and deficiencies in order to target monitoring and program assistance more effectively. PHAs can use the SEMAP performance analysis to assess and improve their own program operations. (24 CFR § 985) CONDITION The Authority was unable to provide sufficient documentation to support the procedures and conclusions of their assessment. CAUSE The Authority did not sufficiently document the procedures and conclusions of their assessment. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None Identified. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a go forward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-002
2023-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 370 instances where a check signature stamp was used and 17 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 770 checks from these 2 accounts of which 387 did not follow their policy regarding authorized check signers. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2023-003
2023-003 – REPORTING – PERFORMANCE REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure PHA performance in key Section 8 program areas and to assign performance ratings. SEMAP provides procedures for HUD to identify PHA management capabilities and deficiencies in order to target monitoring and program assistance more effectively. PHAs can use the SEMAP performance analysis to assess and improve their own program operations. (24 CFR § 985) CONDITION The Authority was unable to provide sufficient documentation to support the procedures and conclusions of their assessment. CAUSE The Authority did not sufficiently document the procedures and conclusions of their assessment. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None Identified. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a go forward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.