FAC Explorer

Audit 298360

FY End
2023-06-30
Total Expended
$894,510
Findings
6
Programs
11
Organization: Pennsylvania Housing Finance Agency (PA)
Year: 2023 Accepted: 2024-03-27
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
385641 2023-001 Significant Deficiency - A
385642 2023-002 Significant Deficiency - A
385643 2023-003 Material Weakness - E
962083 2023-001 Significant Deficiency - A
962084 2023-002 Significant Deficiency - A
962085 2023-003 Material Weakness - E

Programs

ALN Program Spent Major Findings
14.195 Section 8 Housing Assistance Payments Program $513,605 - 0
14.239 Home Investment Partnerships Program $196,701 Yes 1
21.026 Homeowner Assistance Fund $118,496 Yes 1
14.275 Housing Trust Fund $35,799 Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $16,821 Yes 0
10.438 Section 538 Rural Rental Housing Guaranteed Loans $3,000 Yes 0
21.011 Capital Magnet Fund $2,775 - 0
66.458 Capitalization Grants for Clean Water State Revolving Funds $2,107 - 0
14.326 Project Rental Assistance Demonstration (pra Demo) Program of Section 811 Supportive Housing for Persons with Disabilities $1,936 - 0
99.U19 Housing Stability Counseling Program $1,771 - 0
14.169 Housing Counseling Assistance Program $1,499 - 0

Contacts

Name Title Type
S2PKLYWMLA24 Adrianne Trumpy Auditee
7177803823 Daniel Sefick Auditor
No contacts on file

Notes to SEFA

Title: DESCRIPTION OF ORGANIZATION 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. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activities of the Agency 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 Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). The Schedule presents only a selected portion of the operations of the Agency, and it is not intended to and does not present the financial position, changes in net position, or cash flows of the Agency. De Minimis Rate Used: Both Rate Explanation: The Agency does not have a negotiated indirect cost rate and therefore may elect to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Pennsylvania Housing Finance Agency (the Agency) was created by the General Assembly of the Commonwealth of Pennsylvania in 1972 to provide affordable housing for older adults, persons and families of modest means, and persons with disabilities. Pursuant to the Housing Finance Agency Law, Act 1959, P.L. 1688, No. 620, as amended, the Agency is authorized and empowered, among other things, to finance the construction and rehabilitation of housing units for persons and families of low and moderate income, persons with special needs or the elderly, including those who receive assistance from federal government programs.
Title: FEDERAL LOANS/LOAN GUARANTEES 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. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activities of the Agency 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 Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). The Schedule presents only a selected portion of the operations of the Agency, and it is not intended to and does not present the financial position, changes in net position, or cash flows of the Agency. De Minimis Rate Used: Both Rate Explanation: The Agency does not have a negotiated indirect cost rate and therefore may elect to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal loan programs listed below are administered by the Agency, and the balances and transactions related to these programs are included in the Agency’s basic financial statements. Loans outstanding at the beginning of the year, loans made during the year, and administrative costs are presented in the Schedule. The Agency had the following federal loan balances outstanding at June 30, 2023 Program Title and Federal Assistance Listing Number (FALN) LOAN BALANCE ROLL FORWARD Home Investment Partnerships Program (Faln: 14.239): Beginning Balance as of June 30, 2022 (Multifamily Loans) $184,620,991 Total Additions 8,646,739 Total Repayments (1,694,870) Ending Balance as of June 30, 2023 (Multifamily Loans) $191,572,861 Beginning Balance as of June 30, 2022 (Single Family Loans) $2,547,097 Total Additions 53,565 Total Repayments (215,295) Ending Balance as of June 30, 2023 (Single Family Loans) $2,385,367 Housing Trust Fund Program (Faln: 14.275): Beginning Balance as of June 30, 2022 $24,570,328 Total Additions 10,452,303 Total Repayments (124,650) Ending Balance as of June 30, 2023 $34,897,981 DCRP and CCRP (Faln: 21.027): Beginning Balance as of June 30, 2022 $337,500 Total Additions $16,483,484 Total Repayments 0 Ending Balance as of June 30, 2023 $16,820,984 Section 536 Rural Rental Housing Guaranteed Loans (Faln: 10.438): Beginning Balance as of June 30, 2022 $3,388,091 Total Additions 0 Total Repayments (54,390) Ending Balance as of June 30, 2023 3,333,701 x90% The Maximum Loan Guaranteed Balance as of June 30, 2022 $3,000,331 The maximum loan guarantee must not exceed 90% of the outstanding principal per the agreement with the USDA.
Title: SIGNIFICANT EFFECTS OF SUBSEQUENT EVENTS 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. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activities of the Agency 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 Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). The Schedule presents only a selected portion of the operations of the Agency, and it is not intended to and does not present the financial position, changes in net position, or cash flows of the Agency. De Minimis Rate Used: Both Rate Explanation: The Agency does not have a negotiated indirect cost rate and therefore may elect to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. On October 25, 2023, the Agency sold single family mortgage revenue bonds Series 2023-143 A totaling $389,370,000. On October 27, 2023, the Agency sold single family mortgage revenue bonds Series 2023-143 BC totaling $85,900,000. Proceeds were used to purchase new single family mortgage loans and to provide down payment assistance for persons and families of low and moderate income. On February 28, 2024, the Agency sold single family mortgage revenue bond Series 2024-144 totaling $264,680,000. Proceeds will be used to purchase new single family mortgage loans and to provide down payment assistance for persons and families of low and moderate income.

Finding Details

Finding 2023-001
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Home Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Pass-Through Agency: Department of Community and Economic Development Pass-Through Number(s): Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per the compliance supplement, agencies are required to examine the activities and costs of an applicant to the program to determine that they are allowable and therefore can proceed with providing financial assistance. Condition: During our testing of 8 loan disbursements for allowable costs and activities criteria, we noted that 1 development was missing the completed division sign-off form from the pre-commitment meeting. Questioned costs: Unknown. Context: In a statistically valid sample, we noted that 1 of 8 loan disbursements was missing a completed division sign-off form from the pre-commitment meeting in their loan package. The form exists as a way to document that all relevant divisions discussed and confirmed that the applicant was both eligible and allowed to participate in the program. Cause: The internal control put in place regarding the signing of this form was not followed in the regards to the development not in compliance. Effect: There is not definitive proof that all necessary divisions reviewed the project application for allowable costs and activities. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures surrounding the divison sign-off form utilized in the pre-commitment meeting. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Trust Fund Program Assistance Listing Number: 14.275 Federal Award Identification Number and Year: Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Other Matters and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per compliance supplement, payroll should be identified and submitted for reimbursement through IDIS. Condition: One hour of an employee’s time was incorrectly billed to HUD under the HTF program instead of the HOME program. Questioned costs: Known - $39.28 Likely - $773.19 Context: In a statistically valid sample, during testing of 40 pays charged to the HTF program during the fiscal year, 1 of 40 pays did not match between the timesheet and the listing of pays submitted to HUD for reimbursement. Cause: The extra hour was manually corrected on the timesheet in question. Effect: An error in the time coded to HTF and the administrative reimbursement requested of HUD. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures around administrative expenses charged to the HTF program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-003
Federal Agency: U.S. Department of Treasury Federal Program Name: Housing Assistance Fund Program Assistance Listing Number: 21.026 Federal Award Identification Number and Year: Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria or specific requirement: Per the compliance supplement, agencies may provide Housing Assistance Fund Program (“HAF”) funds only to a homeowner with respect to qualified expenses related to the dwelling that is such homeowner’s primary residence. In order to substantiate the disbursement of funds, debt verification is required to be obtained from the vendor to ensure the applicant is delinquent on the qualified expense and to confirm the amount. Condition: During our testing, 13 of 40 participants did not have the required debt verification documentation in their case file. Questioned costs: Unknown Context: In a statistically valid sample, we noted that 13 of 40 HAF participant files were missing a debt verification form in their case file. The form exists as a way to document the participant’s residence. Cause: The subcontractor who administered the HAF program through February 2023 was unable to provide debt verification for all of the applicant files processed by the subcontractor. Effect: There is not definitive proof that HAF disbursement was in accordance with policy nor accurate. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures around the debt verification during the HAF program application process. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-001
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Home Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Pass-Through Agency: Department of Community and Economic Development Pass-Through Number(s): Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per the compliance supplement, agencies are required to examine the activities and costs of an applicant to the program to determine that they are allowable and therefore can proceed with providing financial assistance. Condition: During our testing of 8 loan disbursements for allowable costs and activities criteria, we noted that 1 development was missing the completed division sign-off form from the pre-commitment meeting. Questioned costs: Unknown. Context: In a statistically valid sample, we noted that 1 of 8 loan disbursements was missing a completed division sign-off form from the pre-commitment meeting in their loan package. The form exists as a way to document that all relevant divisions discussed and confirmed that the applicant was both eligible and allowed to participate in the program. Cause: The internal control put in place regarding the signing of this form was not followed in the regards to the development not in compliance. Effect: There is not definitive proof that all necessary divisions reviewed the project application for allowable costs and activities. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures surrounding the divison sign-off form utilized in the pre-commitment meeting. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Trust Fund Program Assistance Listing Number: 14.275 Federal Award Identification Number and Year: Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Other Matters and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per compliance supplement, payroll should be identified and submitted for reimbursement through IDIS. Condition: One hour of an employee’s time was incorrectly billed to HUD under the HTF program instead of the HOME program. Questioned costs: Known - $39.28 Likely - $773.19 Context: In a statistically valid sample, during testing of 40 pays charged to the HTF program during the fiscal year, 1 of 40 pays did not match between the timesheet and the listing of pays submitted to HUD for reimbursement. Cause: The extra hour was manually corrected on the timesheet in question. Effect: An error in the time coded to HTF and the administrative reimbursement requested of HUD. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures around administrative expenses charged to the HTF program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-003
Federal Agency: U.S. Department of Treasury Federal Program Name: Housing Assistance Fund Program Assistance Listing Number: 21.026 Federal Award Identification Number and Year: Various Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria or specific requirement: Per the compliance supplement, agencies may provide Housing Assistance Fund Program (“HAF”) funds only to a homeowner with respect to qualified expenses related to the dwelling that is such homeowner’s primary residence. In order to substantiate the disbursement of funds, debt verification is required to be obtained from the vendor to ensure the applicant is delinquent on the qualified expense and to confirm the amount. Condition: During our testing, 13 of 40 participants did not have the required debt verification documentation in their case file. Questioned costs: Unknown Context: In a statistically valid sample, we noted that 13 of 40 HAF participant files were missing a debt verification form in their case file. The form exists as a way to document the participant’s residence. Cause: The subcontractor who administered the HAF program through February 2023 was unable to provide debt verification for all of the applicant files processed by the subcontractor. Effect: There is not definitive proof that HAF disbursement was in accordance with policy nor accurate. Repeat Finding: Not a repeat finding. Recommendation: We recommend that PHFA review their procedures around the debt verification during the HAF program application process. Views of responsible officials: There is no disagreement with the audit finding.