2022-002 Closing out of grants (Significant Deficiency)
CFDA No.: 14.238
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to perform the procedures necessary to
close out grants in a reasonable time frame after the grants have been fully expended.
Condition: We noted that management of the Authority did not close out several fully-expended
grants that related to older years as of June 30, 2022.
Context: During our auditing of STEL grant expenditures, we noted that several fully-expended
grants that related to older years were not duly closed out as of June 30, 2022. Upon inquiry
with management, this assertion was confirmed.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance. This noncompliance could have resulted in delays in the grant closing
processes by HUD.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, older grants that were fully-expended were not duly closed out on a
timely basis.
Questioned costs: None.
Repeat finding: This is a repeat finding.
Recommendation: We recommend that management of the Authority review its processes for
closing out all fully-expended grants with HUD to ensure that, in the future, when grants are fully
expended, the close-out process begins shortly thereafter.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that several older grants were still shown as “open” and
that the close-out procedures would have to be implemented at some point. Management is
evaluating its processes and procedures related to closing out grants and is planning on
implementing procedures to ensure grants are properly closed.
2022-003 REAC/FDS and Financial Statement Reporting (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to submit unaudited financial statement
information through the REAC system within two months of the PHA’s fiscal year-end (24 CFRR
section 5.801). Additionally, a PHA is required to submit its audited financial statements
annually within nine months after its year-end (24 CFR section 5.801).
Condition: We noted that management of the Authority did not submit its financial information
in the REAC system in a timely manner nor did it submit audited financial statements to HUD in
a timely manner.
Context: During our audit of the Authority, we noted that management submitted its REAC and
FDS reporting information after the due date as established by the terms of the grant.
Additionally, the audited financial statements were not submitted prior to the due date.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, the FDS submission and the audited financial statements were not
filed timely. Management of the Authority tasked with performing the FDS submission and
tasked with providing updated, accurate financial information necessary to have an audit
performed did not possess the requisite accounting knowledge to properly complete these
tasks.
Questioned costs: None.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority review the deadlines for
FDS submission and the financial statement submission and work with the newly retained fee
accountant to ensure that these deadlines are met in the future.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its submissions were not timely. Management
engaged the services of a fee-accountant subsequent to year-end who will assist with
these submissions going forward.
2022-004 Project-Based Budgeting and Accounting (Significant Deficiency)
CFDA No.: 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) implementing asset management must develop and
maintain a system of budgeting and accounting for each project in a manner that allows for
analysis of actual revenues and expenses associated with each property (24 CFR section
990.280(a)). Prior to the beginning of its fiscal year, a PHA is required to prepare an operating
budget. The PHA’s Board of Commissioners is required to review and approve the budget by
resolution. The approved Board resolution must be submitted to HUD (24 CFR section
990.315(a)).
Condition: We noted that management of the Authority did not submit an operating budget by
AMP location for the year ended June 30, 2022.
Context: During our audit inquiries, we were informed that the Authority did not prepare an
operating budget by AMP location for the year ended June 30, 2022.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance. This noncompliance could have resulted in deficiencies in the Board’s
monitoring related to revenues and expenses.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the budgeting process, a budget by AMP location was
not prepared for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to prepare an operating budget by AMP location.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its budget was not prepare by AMP location.
Management engaged the services of a fee-accountant subsequent to year-end who will assist
with the budgeting process starting in the 2024-2025 fiscal year.
2022-005 Grant Requisitions (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to implement project-based practices
related to their operating subsidy and capital grant. This includes making proper and timely
requisitions of funding from the grants.
Condition: We noted that management of the Authority did not, in all instances, make timely
requisitions from its operating and capital grants. Additionally, when requisitions were made,
the amounts were not calculated in accordance with HUD guidelines.
Context: During our audit, we noted that the amounts drawn down for the operating grant and
the capital grant were calculated incorrectly. The calculation used was not in conformity with
HUD regulations. Additionally, we noted that management did not make these requisitions in a
timely manner.
Effect: Management and the Board were not in compliance with the HUD regulations. This
noncompliance could have resulted in the Authority not receiving that total amount of grant
funding to which it was entitled.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the grant requisition process, grant funding was
neither properly nor timely requisitioned for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to better establish policies and procedures to ensure compliance with
the grant requisition processes.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management is evaluating its processes and procedures related to grant
requisitions and is planning on implementing procedures to ensure grants are requisitioned in
the future.
61
2022-003 REAC/FDS and Financial Statement Reporting (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to submit unaudited financial statement
information through the REAC system within two months of the PHA’s fiscal year-end (24 CFRR
section 5.801). Additionally, a PHA is required to submit its audited financial statements
annually within nine months after its year-end (24 CFR section 5.801).
Condition: We noted that management of the Authority did not submit its financial information
in the REAC system in a timely manner nor did it submit audited financial statements to HUD in
a timely manner.
Context: During our audit of the Authority, we noted that management submitted its REAC and
FDS reporting information after the due date as established by the terms of the grant.
Additionally, the audited financial statements were not submitted prior to the due date.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, the FDS submission and the audited financial statements were not
filed timely. Management of the Authority tasked with performing the FDS submission and
tasked with providing updated, accurate financial information necessary to have an audit
performed did not possess the requisite accounting knowledge to properly complete these
tasks.
Questioned costs: None.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority review the deadlines for
FDS submission and the financial statement submission and work with the newly retained fee
accountant to ensure that these deadlines are met in the future.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its submissions were not timely. Management
engaged the services of a fee-accountant subsequent to year-end who will assist with
these submissions going forward.
2022-005 Grant Requisitions (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to implement project-based practices
related to their operating subsidy and capital grant. This includes making proper and timely
requisitions of funding from the grants.
Condition: We noted that management of the Authority did not, in all instances, make timely
requisitions from its operating and capital grants. Additionally, when requisitions were made,
the amounts were not calculated in accordance with HUD guidelines.
Context: During our audit, we noted that the amounts drawn down for the operating grant and
the capital grant were calculated incorrectly. The calculation used was not in conformity with
HUD regulations. Additionally, we noted that management did not make these requisitions in a
timely manner.
Effect: Management and the Board were not in compliance with the HUD regulations. This
noncompliance could have resulted in the Authority not receiving that total amount of grant
funding to which it was entitled.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the grant requisition process, grant funding was
neither properly nor timely requisitioned for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to better establish policies and procedures to ensure compliance with
the grant requisition processes.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management is evaluating its processes and procedures related to grant
requisitions and is planning on implementing procedures to ensure grants are requisitioned in
the future.
61
2022-002 Closing out of grants (Significant Deficiency)
CFDA No.: 14.238
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to perform the procedures necessary to
close out grants in a reasonable time frame after the grants have been fully expended.
Condition: We noted that management of the Authority did not close out several fully-expended
grants that related to older years as of June 30, 2022.
Context: During our auditing of STEL grant expenditures, we noted that several fully-expended
grants that related to older years were not duly closed out as of June 30, 2022. Upon inquiry
with management, this assertion was confirmed.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance. This noncompliance could have resulted in delays in the grant closing
processes by HUD.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, older grants that were fully-expended were not duly closed out on a
timely basis.
Questioned costs: None.
Repeat finding: This is a repeat finding.
Recommendation: We recommend that management of the Authority review its processes for
closing out all fully-expended grants with HUD to ensure that, in the future, when grants are fully
expended, the close-out process begins shortly thereafter.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that several older grants were still shown as “open” and
that the close-out procedures would have to be implemented at some point. Management is
evaluating its processes and procedures related to closing out grants and is planning on
implementing procedures to ensure grants are properly closed.
2022-003 REAC/FDS and Financial Statement Reporting (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to submit unaudited financial statement
information through the REAC system within two months of the PHA’s fiscal year-end (24 CFRR
section 5.801). Additionally, a PHA is required to submit its audited financial statements
annually within nine months after its year-end (24 CFR section 5.801).
Condition: We noted that management of the Authority did not submit its financial information
in the REAC system in a timely manner nor did it submit audited financial statements to HUD in
a timely manner.
Context: During our audit of the Authority, we noted that management submitted its REAC and
FDS reporting information after the due date as established by the terms of the grant.
Additionally, the audited financial statements were not submitted prior to the due date.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, the FDS submission and the audited financial statements were not
filed timely. Management of the Authority tasked with performing the FDS submission and
tasked with providing updated, accurate financial information necessary to have an audit
performed did not possess the requisite accounting knowledge to properly complete these
tasks.
Questioned costs: None.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority review the deadlines for
FDS submission and the financial statement submission and work with the newly retained fee
accountant to ensure that these deadlines are met in the future.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its submissions were not timely. Management
engaged the services of a fee-accountant subsequent to year-end who will assist with
these submissions going forward.
2022-004 Project-Based Budgeting and Accounting (Significant Deficiency)
CFDA No.: 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) implementing asset management must develop and
maintain a system of budgeting and accounting for each project in a manner that allows for
analysis of actual revenues and expenses associated with each property (24 CFR section
990.280(a)). Prior to the beginning of its fiscal year, a PHA is required to prepare an operating
budget. The PHA’s Board of Commissioners is required to review and approve the budget by
resolution. The approved Board resolution must be submitted to HUD (24 CFR section
990.315(a)).
Condition: We noted that management of the Authority did not submit an operating budget by
AMP location for the year ended June 30, 2022.
Context: During our audit inquiries, we were informed that the Authority did not prepare an
operating budget by AMP location for the year ended June 30, 2022.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance. This noncompliance could have resulted in deficiencies in the Board’s
monitoring related to revenues and expenses.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the budgeting process, a budget by AMP location was
not prepared for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to prepare an operating budget by AMP location.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its budget was not prepare by AMP location.
Management engaged the services of a fee-accountant subsequent to year-end who will assist
with the budgeting process starting in the 2024-2025 fiscal year.
2022-005 Grant Requisitions (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to implement project-based practices
related to their operating subsidy and capital grant. This includes making proper and timely
requisitions of funding from the grants.
Condition: We noted that management of the Authority did not, in all instances, make timely
requisitions from its operating and capital grants. Additionally, when requisitions were made,
the amounts were not calculated in accordance with HUD guidelines.
Context: During our audit, we noted that the amounts drawn down for the operating grant and
the capital grant were calculated incorrectly. The calculation used was not in conformity with
HUD regulations. Additionally, we noted that management did not make these requisitions in a
timely manner.
Effect: Management and the Board were not in compliance with the HUD regulations. This
noncompliance could have resulted in the Authority not receiving that total amount of grant
funding to which it was entitled.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the grant requisition process, grant funding was
neither properly nor timely requisitioned for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to better establish policies and procedures to ensure compliance with
the grant requisition processes.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management is evaluating its processes and procedures related to grant
requisitions and is planning on implementing procedures to ensure grants are requisitioned in
the future.
61
2022-003 REAC/FDS and Financial Statement Reporting (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to submit unaudited financial statement
information through the REAC system within two months of the PHA’s fiscal year-end (24 CFRR
section 5.801). Additionally, a PHA is required to submit its audited financial statements
annually within nine months after its year-end (24 CFR section 5.801).
Condition: We noted that management of the Authority did not submit its financial information
in the REAC system in a timely manner nor did it submit audited financial statements to HUD in
a timely manner.
Context: During our audit of the Authority, we noted that management submitted its REAC and
FDS reporting information after the due date as established by the terms of the grant.
Additionally, the audited financial statements were not submitted prior to the due date.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, the FDS submission and the audited financial statements were not
filed timely. Management of the Authority tasked with performing the FDS submission and
tasked with providing updated, accurate financial information necessary to have an audit
performed did not possess the requisite accounting knowledge to properly complete these
tasks.
Questioned costs: None.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority review the deadlines for
FDS submission and the financial statement submission and work with the newly retained fee
accountant to ensure that these deadlines are met in the future.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its submissions were not timely. Management
engaged the services of a fee-accountant subsequent to year-end who will assist with
these submissions going forward.
2022-005 Grant Requisitions (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to implement project-based practices
related to their operating subsidy and capital grant. This includes making proper and timely
requisitions of funding from the grants.
Condition: We noted that management of the Authority did not, in all instances, make timely
requisitions from its operating and capital grants. Additionally, when requisitions were made,
the amounts were not calculated in accordance with HUD guidelines.
Context: During our audit, we noted that the amounts drawn down for the operating grant and
the capital grant were calculated incorrectly. The calculation used was not in conformity with
HUD regulations. Additionally, we noted that management did not make these requisitions in a
timely manner.
Effect: Management and the Board were not in compliance with the HUD regulations. This
noncompliance could have resulted in the Authority not receiving that total amount of grant
funding to which it was entitled.
Cause: Due to a change in management at the Authority, and due to a lack of training by the
accounting personnel on accounting and the grant requisition process, grant funding was
neither properly nor timely requisitioned for the year ended June 30, 2022.
Questioned costs: None identifies.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly
retained fee accountant to better establish policies and procedures to ensure compliance with
the grant requisition processes.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management is evaluating its processes and procedures related to grant
requisitions and is planning on implementing procedures to ensure grants are requisitioned in
the future.
61