FAC Explorer

Audit 299209

FY End
2023-06-30
Total Expended
$5.60M
Findings
8
Programs
3
Organization: Pittsfield Housing Authority (RI)
Year: 2023 Accepted: 2024-03-28
Auditor: Marcum LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
386894 2023-001 Material Weakness Yes E
386895 2023-002 Material Weakness Yes N
386896 2023-003 Material Weakness Yes E
386897 2023-004 Material Weakness - I
963336 2023-001 Material Weakness Yes E
963337 2023-002 Material Weakness Yes N
963338 2023-003 Material Weakness Yes E
963339 2023-004 Material Weakness - I

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $4.66M Yes 2
14.850 Public and Indian Housing $825,861 Yes 2
14.872 Public Housing Capital Fund $114,416 - 0

Contacts

Name Title Type
NGFXCE3QD1E8 Susan Martino Auditee
4134435936 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 Pittsfield 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 Pittsfield Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Pittsfield 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: NOTE 3 – INDIRECT COST RATE The Pittsfield Housing Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
2023-001 – ELIGIBILITY: RENT CALCULATION Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Voucher Cluster CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 982.516). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 982.201, 982.515, 982.516). CONDITION As a result of our procedures, we identified five instances of missing income verification. CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent and the housing assistance payment was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 580. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-001. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-002
2023-002 – SPECIAL TESTS AND PROVISIONS: RENT REASONABLENESS Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 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 The Authority did not perform rent reasonableness assessments. CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT The Authority cannot ensure that HAP payments to landlords were reasonable. QUESTIONED COSTS Questioned Costs - $4,337,214. CONTEXT We selected a sample of 40 from a population of 580. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-002. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-003
2023-003 – ELIGIBILITY: RENT CALCULATION Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 960.259). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 960.253, 960.255, 960.259). CONDITION As a result of our procedures, we identified the following exceptions in our testing:  Twenty-seven (27) instances of income, asset or medical miscalculations or insufficient verification  Ten (10) instances of untimely reexaminations CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 153. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-003. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-004
2023-004 – PROCUREMENT AND SUSPENSION AND DEBARMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA Any contract not exceeding $20,000 for construction or public improvements and $25,000 for goods or services may be made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $20,000 for construction or public improvements and $25,000 for goods or services no less than three offerors shall be solicited to submit price quotations. (Pittsfield Housing Authority Procurement Policy) CONDITION We examined a sample of 5 vendors used for goods and services during fiscal year 2023 and identified 5 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. 2023-004 – PROCUREMENT AND SUSPENSION AND DEBARMENT (CONTINUED) CAUSE The Authority’s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. 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 Estimated questioned costs of $230,551 representing the total payments to these 5 vendors. CONTEXT We selected a sample of 5 from a population of approximately 50 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors.
Finding 2023-001
2023-001 – ELIGIBILITY: RENT CALCULATION Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Voucher Cluster CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 982.516). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 982.201, 982.515, 982.516). CONDITION As a result of our procedures, we identified five instances of missing income verification. CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent and the housing assistance payment was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 580. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-001. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-002
2023-002 – SPECIAL TESTS AND PROVISIONS: RENT REASONABLENESS Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 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 The Authority did not perform rent reasonableness assessments. CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT The Authority cannot ensure that HAP payments to landlords were reasonable. QUESTIONED COSTS Questioned Costs - $4,337,214. CONTEXT We selected a sample of 40 from a population of 580. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-002. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-003
2023-003 – ELIGIBILITY: RENT CALCULATION Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 960.259). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 960.253, 960.255, 960.259). CONDITION As a result of our procedures, we identified the following exceptions in our testing:  Twenty-seven (27) instances of income, asset or medical miscalculations or insufficient verification  Ten (10) instances of untimely reexaminations CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 153. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2022-003. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
Finding 2023-004
2023-004 – PROCUREMENT AND SUSPENSION AND DEBARMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA Any contract not exceeding $20,000 for construction or public improvements and $25,000 for goods or services may be made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $20,000 for construction or public improvements and $25,000 for goods or services no less than three offerors shall be solicited to submit price quotations. (Pittsfield Housing Authority Procurement Policy) CONDITION We examined a sample of 5 vendors used for goods and services during fiscal year 2023 and identified 5 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. 2023-004 – PROCUREMENT AND SUSPENSION AND DEBARMENT (CONTINUED) CAUSE The Authority’s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. 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 Estimated questioned costs of $230,551 representing the total payments to these 5 vendors. CONTEXT We selected a sample of 5 from a population of approximately 50 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors.