FAC Explorer

Audit 302533

FY End
2022-06-30
Total Expended
$13.62M
Findings
18
Programs
13
Organization: Municipality of Juana Diaz (PR)
Year: 2022 Accepted: 2024-04-03
Auditor: Pedro C Ortiz Ledee CPA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392260 2022-005 Material Weakness - J
392261 2022-006 Material Weakness - E
392262 2022-006 Material Weakness - E
392263 2022-007 Material Weakness Yes L
392264 2022-007 Material Weakness Yes L
392265 2022-007 Material Weakness Yes L
392266 2022-008 Material Weakness - N
392267 2022-009 Material Weakness - N
392268 2022-009 Material Weakness - N
968702 2022-005 Material Weakness - J
968703 2022-006 Material Weakness - E
968704 2022-006 Material Weakness - E
968705 2022-007 Material Weakness Yes L
968706 2022-007 Material Weakness Yes L
968707 2022-007 Material Weakness Yes L
968708 2022-008 Material Weakness - N
968709 2022-009 Material Weakness - N
968710 2022-009 Material Weakness - N

Programs

ALN Program Spent Major Findings
97.030 Community Disaster Loans $2.61M - 0
93.356 Head Start Disaster Recovery $1.38M - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.21M Yes 0
14.218 Community Development Block Grants/entitlement Grants $461,967 Yes 0
21.019 Coronavirus Relief Fund $353,054 Yes 0
10.558 Child and Adult Care Food Program $105,205 - 0
93.600 Head Start $96,463 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $66,155 Yes 0
14.871 Section 8 Housing Choice Vouchers $45,360 Yes 3
14.241 Housing Opportunities for Persons with Aids $37,317 - 0
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $36,115 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $26,400 Yes 0
14.896 Family Self-Sufficiency Program $24,680 - 0

Contacts

Name Title Type
QW6NNELX38Y7 Maria Boglio Auditee
7878372275 Pedro C. Ortiz Ledee Auditor
No contacts on file

Notes to SEFA

Title: NOTE A – BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (“the schedule”) includes the federal grant activity of the Municipality under programs of the federal government for the fiscal year ended June 30, 2022. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulation (CFR Part 200), Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, some amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position and changes in net position of the Municipality.
Title: NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
Title: NOTE C – ASSISTANCE LISTING NUMBER Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Assistance Listing Number, formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all Federal assistance award mechanisms, including Federal grants and cooperative agreements. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
Title: NOTE D – INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Title: NOTE E – MAJOR PROGRAMS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
Title: NOTE F – SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. During fiscal year 2021-2022, there were no awards passed through to sub-recipients.
Title: NOTE G – COMMUNITY DISASTER LOAN PROGRAM (CFDA No. 97.030) Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Community Disaster Loan (CDL) provide assistance to local governments to overcome a loss in revenues as a result of a natural disaster, in order to perform its governmental operational functions. Neither principal nor interest payments are required until maturity. The terms of the loan provide that if the municipality has not recovered sufficiently to meet its operating budget after three full fiscal years, repayment of all or part of the loan may be cancelled. Federal statutes and regulations do not impose continuing compliance requirements on the outstanding balance of the loan, other than the repayment of the loan. Therefore, the outstanding balance of the loan is not included in the face of the SEFA. But, on September 30, 2021, the United States Congress passed “The Extending Government Funding and Delivering Emergency Assistance Act” (P.L. 117-43). According to P.L. 117-43 Sec. 1601 (a): “Repayments of the remining balances of all loans, as of September 30, 2021, by the Federal Emergency management Agency under section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5184 are hereby cancelled.” The balance of the loans, as of September 30, 2021, was $9,862,092, and pursuant P.L. 117-43, repayment of this remaining balance was cancelled. Program transactions during the fiscal year 2021-2022 are as follows:
Title: NOTE H – RECONCILIATION OF EXPENDITURES PRESENTED IN THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO THE EXPENDITURES PRESENTED IN THE BASIC FINANCIAL STATEMENT Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements:  Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.  Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.  Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The reconciliation between the expenditures in the fund financial statements and the expenditures in the Schedule of Expenditures of Federal Awards is as follows:

Finding Details

Finding 2022-005
FINDING 2022-005 FEDERAL PROGRAMS COMMUNITY DEVELOPMENT BLOCK GRANTS- ENTITLEMENT GRANTS CLUSTER: COMMUNITY DEVELOPMENT BLOCK GRANT/ ENTITLEMENT GRANTS (ASSISTANCE LISTING NUMBER 14.218) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT PROGRAM INCOME CONDITION During the Program Income test, I noted that the Municipality did not record $96,750 of program income received during the fiscal year 2021-2022, in the Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077). This program income was recorded in IDIS in the fiscal year 2022-2023. CRITERIA Code of Federal Regulations 24, Section 570.504 (a), stated that the receipts and expenditures of program income shall be recorded as part of the financial transactions of the grant program. Also, 24 CFR 570.504(b)(2)(ii) states that if the recipient chooses to retain program income, that program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U. S. Treasury. CAUSE During the fiscal year 2021-2022, the Program did not maintain appropriate internal controls to ensure that all program income transactions were recorded timely on the IDIS system. EFFECT The program income funds were not available in IDIS, to draw down to pay for eligible activities. RECOMMENDATION I recommend management to continue improving the internal controls and procedures to ensure that the financial transactions related to the program income are properly recorded in the IDIS System. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable.
Finding 2022-006
FINDING NUMBER 2022-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, fifteen (15) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In one (1) reexamination, the housing assistant payment (HAP) calculation was not performed using the applicable payment standard. The application of the correct payment standard modifies the HAP amount paid. b. In five (5) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. c. Twelve (12) files did not include the release form, HUD-9886, signed by all the family members who were 18 years or older. d. Five (5) files did not include certification of the verification in the sex offenders register for one or more adult family member. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. Also, 24 CFR 982.516(g)(1) states that as a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (including any release and consent as required under § 5.230 of this title) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or HUD such information as the PHA or HUD determines to be necessary. CRITERIA Code of Federal Regulation 24, Section 982.503 (a) states that (1) HUD publishes the fair market rents for each market area in the United States. The PHA must adopt a payment standard schedule that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. For each FMR area, the PHA must establish payment standard amounts for each “unit size.” Unit size is measured by number of bedrooms (zero-bedroom, one-bedroom, and so on). (2) The payment standard amounts on the PHA schedule are used to calculate the monthly housing assistance payment for a family (§982.505). In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided. CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to persons that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines, and to obtain in a timely manner all of the required documentation for each reexamination executed. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure timely registration of program income transactions in the Integrated Disbursement and Information System (IDIS). During the fiscal year 2021-2022, changes occurred in the program's management staff, which may have led to the situation mentioned in the finding.
Finding 2022-006
FINDING NUMBER 2022-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, fifteen (15) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In one (1) reexamination, the housing assistant payment (HAP) calculation was not performed using the applicable payment standard. The application of the correct payment standard modifies the HAP amount paid. b. In five (5) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. c. Twelve (12) files did not include the release form, HUD-9886, signed by all the family members who were 18 years or older. d. Five (5) files did not include certification of the verification in the sex offenders register for one or more adult family member. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. Also, 24 CFR 982.516(g)(1) states that as a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (including any release and consent as required under § 5.230 of this title) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or HUD such information as the PHA or HUD determines to be necessary. CRITERIA Code of Federal Regulation 24, Section 982.503 (a) states that (1) HUD publishes the fair market rents for each market area in the United States. The PHA must adopt a payment standard schedule that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. For each FMR area, the PHA must establish payment standard amounts for each “unit size.” Unit size is measured by number of bedrooms (zero-bedroom, one-bedroom, and so on). (2) The payment standard amounts on the PHA schedule are used to calculate the monthly housing assistance payment for a family (§982.505). In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided. CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to persons that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines, and to obtain in a timely manner all of the required documentation for each reexamination executed. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure timely registration of program income transactions in the Integrated Disbursement and Information System (IDIS). During the fiscal year 2021-2022, changes occurred in the program's management staff, which may have led to the situation mentioned in the finding.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-008
FINDING NUMBER 2022-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS (ASSISTANCE LISTING NUMBER 14.871) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT SPECIAL TEST- HOUSING QUALITY STANDARDS INSPECTIONS CONDITION The Program staff did not perform the required quality control re-inspections during fiscal year 2021-2022. CRITERIA Code of Federal Regulations 24, Section 982.405 (b) states that the PHA must conduct supervisory quality control HQS inspections. 24 CFR 985.2 (b) specifies the minimum sample size requirements for quality control of HQS inspections. CAUSE The Program’s internal controls and procedures fail to ensure that the quality control re-inspections were performed during the fiscal year 2021-2022. EFFECT The lack of quality re-inspections procedures could cause that possible errors made during the ongoing re-inspections process could be detected and corrected. RECOMMENDATION I recommend management to continue strengthening the internal controls and procedures to ensure that required quality control re-inspections are performed annually. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the required quality control re-inspections are performed annually.
Finding 2022-009
FINDING NUMBER 2022-009 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2022, have differences with the amounts reported in the audited financial information for the fiscal year ended June 30, 2022, submitted through the FASS_x0002_PH system, as follows: CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD.RECOMMENDATION I recommended management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the VMS. Also, the Program staff was instructed to analyze previous equity balances reported in the VMS, an realize any necessary corrections.
Finding 2022-009
FINDING NUMBER 2022-009 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2022, have differences with the amounts reported in the audited financial information for the fiscal year ended June 30, 2022, submitted through the FASS_x0002_PH system, as follows: CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD.RECOMMENDATION I recommended management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the VMS. Also, the Program staff was instructed to analyze previous equity balances reported in the VMS, an realize any necessary corrections.
Finding 2022-005
FINDING 2022-005 FEDERAL PROGRAMS COMMUNITY DEVELOPMENT BLOCK GRANTS- ENTITLEMENT GRANTS CLUSTER: COMMUNITY DEVELOPMENT BLOCK GRANT/ ENTITLEMENT GRANTS (ASSISTANCE LISTING NUMBER 14.218) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT PROGRAM INCOME CONDITION During the Program Income test, I noted that the Municipality did not record $96,750 of program income received during the fiscal year 2021-2022, in the Integrated Disbursement and Information System (IDIS) (OMB No. 2506-0077). This program income was recorded in IDIS in the fiscal year 2022-2023. CRITERIA Code of Federal Regulations 24, Section 570.504 (a), stated that the receipts and expenditures of program income shall be recorded as part of the financial transactions of the grant program. Also, 24 CFR 570.504(b)(2)(ii) states that if the recipient chooses to retain program income, that program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U. S. Treasury. CAUSE During the fiscal year 2021-2022, the Program did not maintain appropriate internal controls to ensure that all program income transactions were recorded timely on the IDIS system. EFFECT The program income funds were not available in IDIS, to draw down to pay for eligible activities. RECOMMENDATION I recommend management to continue improving the internal controls and procedures to ensure that the financial transactions related to the program income are properly recorded in the IDIS System. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable.
Finding 2022-006
FINDING NUMBER 2022-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, fifteen (15) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In one (1) reexamination, the housing assistant payment (HAP) calculation was not performed using the applicable payment standard. The application of the correct payment standard modifies the HAP amount paid. b. In five (5) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. c. Twelve (12) files did not include the release form, HUD-9886, signed by all the family members who were 18 years or older. d. Five (5) files did not include certification of the verification in the sex offenders register for one or more adult family member. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. Also, 24 CFR 982.516(g)(1) states that as a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (including any release and consent as required under § 5.230 of this title) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or HUD such information as the PHA or HUD determines to be necessary. CRITERIA Code of Federal Regulation 24, Section 982.503 (a) states that (1) HUD publishes the fair market rents for each market area in the United States. The PHA must adopt a payment standard schedule that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. For each FMR area, the PHA must establish payment standard amounts for each “unit size.” Unit size is measured by number of bedrooms (zero-bedroom, one-bedroom, and so on). (2) The payment standard amounts on the PHA schedule are used to calculate the monthly housing assistance payment for a family (§982.505). In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided. CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to persons that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines, and to obtain in a timely manner all of the required documentation for each reexamination executed. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure timely registration of program income transactions in the Integrated Disbursement and Information System (IDIS). During the fiscal year 2021-2022, changes occurred in the program's management staff, which may have led to the situation mentioned in the finding.
Finding 2022-006
FINDING NUMBER 2022-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, fifteen (15) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In one (1) reexamination, the housing assistant payment (HAP) calculation was not performed using the applicable payment standard. The application of the correct payment standard modifies the HAP amount paid. b. In five (5) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. c. Twelve (12) files did not include the release form, HUD-9886, signed by all the family members who were 18 years or older. d. Five (5) files did not include certification of the verification in the sex offenders register for one or more adult family member. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. Also, 24 CFR 982.516(g)(1) states that as a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (including any release and consent as required under § 5.230 of this title) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or HUD such information as the PHA or HUD determines to be necessary. CRITERIA Code of Federal Regulation 24, Section 982.503 (a) states that (1) HUD publishes the fair market rents for each market area in the United States. The PHA must adopt a payment standard schedule that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. For each FMR area, the PHA must establish payment standard amounts for each “unit size.” Unit size is measured by number of bedrooms (zero-bedroom, one-bedroom, and so on). (2) The payment standard amounts on the PHA schedule are used to calculate the monthly housing assistance payment for a family (§982.505). In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided. CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to persons that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure that the reexamination and HAP determination processes are performed according to program requirements and guidelines, and to obtain in a timely manner all of the required documentation for each reexamination executed. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure timely registration of program income transactions in the Integrated Disbursement and Information System (IDIS). During the fiscal year 2021-2022, changes occurred in the program's management staff, which may have led to the situation mentioned in the finding.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-007
FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2022-008
FINDING NUMBER 2022-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS (ASSISTANCE LISTING NUMBER 14.871) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT SPECIAL TEST- HOUSING QUALITY STANDARDS INSPECTIONS CONDITION The Program staff did not perform the required quality control re-inspections during fiscal year 2021-2022. CRITERIA Code of Federal Regulations 24, Section 982.405 (b) states that the PHA must conduct supervisory quality control HQS inspections. 24 CFR 985.2 (b) specifies the minimum sample size requirements for quality control of HQS inspections. CAUSE The Program’s internal controls and procedures fail to ensure that the quality control re-inspections were performed during the fiscal year 2021-2022. EFFECT The lack of quality re-inspections procedures could cause that possible errors made during the ongoing re-inspections process could be detected and corrected. RECOMMENDATION I recommend management to continue strengthening the internal controls and procedures to ensure that required quality control re-inspections are performed annually. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the required quality control re-inspections are performed annually.
Finding 2022-009
FINDING NUMBER 2022-009 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2022, have differences with the amounts reported in the audited financial information for the fiscal year ended June 30, 2022, submitted through the FASS_x0002_PH system, as follows: CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD.RECOMMENDATION I recommended management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the VMS. Also, the Program staff was instructed to analyze previous equity balances reported in the VMS, an realize any necessary corrections.
Finding 2022-009
FINDING NUMBER 2022-009 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2022, have differences with the amounts reported in the audited financial information for the fiscal year ended June 30, 2022, submitted through the FASS_x0002_PH system, as follows: CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD.RECOMMENDATION I recommended management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING Not applicable. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the VMS. Also, the Program staff was instructed to analyze previous equity balances reported in the VMS, an realize any necessary corrections.