Finding 2022-003 ? Information on the federal program: CFDA 14.850; U.S Department of Housing and Urban Development; Public and Indian Housing; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Eligibility requirements in accordance with 24 CFR 960 relating to admission to, and occupancy of, public housing. ? Condition: The audit identified exceptions in tenant file exams relating to waiting list, rent choice, utility allowances and flat rate rent requirements. ? Questioned costs: My sample projected error was $85,031 due to incorrect calculation of flat rate rent amounts, in relation to the entire population. ? Context: The audit identified 4 rent calculation errors, 3 waiting list exceptions, and 4 rent choice requirement exceptions from my sample of 24 tenants reviewed. Also, the utility allowance and flat rate rent schedules have not been properly updated. ? Effect: The errors noted were due to missing documentation, out of date utility allowances and flat rate rents. The potential misstatement is considered to be material to the financial statements. ? Cause: Weakness in internal controls over tenant?s annual certifications relating to proper documentation and calculation of rent. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish procedures for managements review and supervision over tenant?s annual certifications. Specific internal control procedures should be implemented to ensure, for both family income examinations and reexaminations, documentation in the family file of: (1) waiting list documentation; (2) properly executed rent choice documentation; (3) utility allowance schedule annually updated reflecting the current cost and using normal patterns of consumption for the community as a whole, and current local utility rates; and (4) other factors that affect the determination of adjusted income or income-based rent in accordance with 24 CFR section 960. ? Views of Responsible Officials and Planned Corrective Actions: We will review tenant?s files for the deficiencies identified above and implement new internal control procedures to correct these conditions. We will also provide increased supervision and training over this area. We anticipate a complete resolution of this type of error by December 31, 2022.
Finding 2022-004 ? Information on the federal program: CFDA 14.850; U.S Department of Housing and Urban Development; Public and Indian Housing; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Allowable costs/cost principals in accordance with 24 CFR 200, the PHA Annual Contributions Contract, and PHA Internal Control Policy. ? Condition: The audit identified exceptions in expenditures relating to allowability, in that certain disbursements were not executed in accordance with PHA operating controls, including the internal control policy, annual contributions contract, procurement policy, and operating budget. ? Questioned costs: My sample of 70 disbursements contained 3 exceptions identified as unallowable costs associated with payments for items questioned as necessary costs in providing for government subsidized housing operations. I noted $515 of sales taxes paid, $75 in unsubstantiated items, and $6,084 in questionable items purchased using online platforms with a credit card not authorized by the internal control policy, delivered to a personal residence. I also noted budgetary overruns in controlled accounts not identified by the PHA (see Note 2 to the financial statements). ? Context: The audit identified 3 sample exceptions from my sample of 70 disbursements reviewed. ? Effect: The errors noted were due to a lack of controls over the purchasing process. The projected misstatement of $27,311 is considered to be a significant deficiency. ? Cause: Weakness in internal controls over purchasing relating to proper authorization, documentation, program compliance and budgetary procedures. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish and enforce controls over Board of Commissioners and Managements review and supervision of purchasing procedures. Specific internal control and budgetary procedures should be implemented to ensure all costs are reasonable and necessary for the economical operation of the project for the purpose of serving families of low-income status in accordance with 24 CFR section 200. ? Views of Responsible Officials and Planned Corrective Actions: We will review existing policies, implementing control procedures to correct these deficiencies. We will also provide increased supervision and training over this area. We anticipate a complete resolution of this type of error by December 31, 2022.
Finding 2022-005 ? Information on the federal program: CFDA 14.872; U.S Department of Housing and Urban Development; Public Housing Capital Fund; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Period of Performance in accordance with 24 CFR 905 and the PHA Annual and 5-Year Action Plan. ? Condition: The audit identified exceptions in properly obligating and expending Capital Fund Programs (CFP) in accordance with CFP program requirements. ? Questioned costs: There were no questioned costs, although the PHA must obligate at least 90 percent of each CFP program within 24 months of the funds of becoming available to the PHA for obligation. Additionally, unless HUD approves an extension, the PHA must expend all grant funds no later than 48 months after HUD executes the ACC Amendment, 24 CFR section 905.306(f). Failure to properly obligate/expend for any month during the fiscal year, HUD shall withhold all new Capital Fund grants from any PHA that has unobligated funds in violation of the obligation/expenditure requirements. The penalty will be imposed once the violations are known. ? Context: CFP 501-17 has not been closed out, although is fully expended. CFP 501-18 is 47% expended as of August 26, 2022. There has been no disbursement activity in CFP?s 501-19, 501-20, 501-21, or 501-22. ? Effect: Non-compliance with the period of performance requirements could result in the loss of future CFP funding. ? Cause: Weakness in internal controls over managing the CFP?s in accordance with the PHA Annual and 5-Year Action Plan. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish and enforce controls over administration of CFP?s to ensure safe, sanitary, and affordable dwellings are maintained for the purpose of serving families of low-income status in accordance with 24 CFR section 905. ? Views of Responsible Officials and Planned Corrective Actions: We will review existing control procedures to correct these deficiencies. We are currently working with contractors to complete improvement projects in a timely manner. We will also provide increased supervision and training over the administration of Capital Fund Programs. We anticipate a complete resolution of this type of error by December 31, 2022.
Finding 2022-003 ? Information on the federal program: CFDA 14.850; U.S Department of Housing and Urban Development; Public and Indian Housing; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Eligibility requirements in accordance with 24 CFR 960 relating to admission to, and occupancy of, public housing. ? Condition: The audit identified exceptions in tenant file exams relating to waiting list, rent choice, utility allowances and flat rate rent requirements. ? Questioned costs: My sample projected error was $85,031 due to incorrect calculation of flat rate rent amounts, in relation to the entire population. ? Context: The audit identified 4 rent calculation errors, 3 waiting list exceptions, and 4 rent choice requirement exceptions from my sample of 24 tenants reviewed. Also, the utility allowance and flat rate rent schedules have not been properly updated. ? Effect: The errors noted were due to missing documentation, out of date utility allowances and flat rate rents. The potential misstatement is considered to be material to the financial statements. ? Cause: Weakness in internal controls over tenant?s annual certifications relating to proper documentation and calculation of rent. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish procedures for managements review and supervision over tenant?s annual certifications. Specific internal control procedures should be implemented to ensure, for both family income examinations and reexaminations, documentation in the family file of: (1) waiting list documentation; (2) properly executed rent choice documentation; (3) utility allowance schedule annually updated reflecting the current cost and using normal patterns of consumption for the community as a whole, and current local utility rates; and (4) other factors that affect the determination of adjusted income or income-based rent in accordance with 24 CFR section 960. ? Views of Responsible Officials and Planned Corrective Actions: We will review tenant?s files for the deficiencies identified above and implement new internal control procedures to correct these conditions. We will also provide increased supervision and training over this area. We anticipate a complete resolution of this type of error by December 31, 2022.
Finding 2022-004 ? Information on the federal program: CFDA 14.850; U.S Department of Housing and Urban Development; Public and Indian Housing; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Allowable costs/cost principals in accordance with 24 CFR 200, the PHA Annual Contributions Contract, and PHA Internal Control Policy. ? Condition: The audit identified exceptions in expenditures relating to allowability, in that certain disbursements were not executed in accordance with PHA operating controls, including the internal control policy, annual contributions contract, procurement policy, and operating budget. ? Questioned costs: My sample of 70 disbursements contained 3 exceptions identified as unallowable costs associated with payments for items questioned as necessary costs in providing for government subsidized housing operations. I noted $515 of sales taxes paid, $75 in unsubstantiated items, and $6,084 in questionable items purchased using online platforms with a credit card not authorized by the internal control policy, delivered to a personal residence. I also noted budgetary overruns in controlled accounts not identified by the PHA (see Note 2 to the financial statements). ? Context: The audit identified 3 sample exceptions from my sample of 70 disbursements reviewed. ? Effect: The errors noted were due to a lack of controls over the purchasing process. The projected misstatement of $27,311 is considered to be a significant deficiency. ? Cause: Weakness in internal controls over purchasing relating to proper authorization, documentation, program compliance and budgetary procedures. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish and enforce controls over Board of Commissioners and Managements review and supervision of purchasing procedures. Specific internal control and budgetary procedures should be implemented to ensure all costs are reasonable and necessary for the economical operation of the project for the purpose of serving families of low-income status in accordance with 24 CFR section 200. ? Views of Responsible Officials and Planned Corrective Actions: We will review existing policies, implementing control procedures to correct these deficiencies. We will also provide increased supervision and training over this area. We anticipate a complete resolution of this type of error by December 31, 2022.
Finding 2022-005 ? Information on the federal program: CFDA 14.872; U.S Department of Housing and Urban Development; Public Housing Capital Fund; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Period of Performance in accordance with 24 CFR 905 and the PHA Annual and 5-Year Action Plan. ? Condition: The audit identified exceptions in properly obligating and expending Capital Fund Programs (CFP) in accordance with CFP program requirements. ? Questioned costs: There were no questioned costs, although the PHA must obligate at least 90 percent of each CFP program within 24 months of the funds of becoming available to the PHA for obligation. Additionally, unless HUD approves an extension, the PHA must expend all grant funds no later than 48 months after HUD executes the ACC Amendment, 24 CFR section 905.306(f). Failure to properly obligate/expend for any month during the fiscal year, HUD shall withhold all new Capital Fund grants from any PHA that has unobligated funds in violation of the obligation/expenditure requirements. The penalty will be imposed once the violations are known. ? Context: CFP 501-17 has not been closed out, although is fully expended. CFP 501-18 is 47% expended as of August 26, 2022. There has been no disbursement activity in CFP?s 501-19, 501-20, 501-21, or 501-22. ? Effect: Non-compliance with the period of performance requirements could result in the loss of future CFP funding. ? Cause: Weakness in internal controls over managing the CFP?s in accordance with the PHA Annual and 5-Year Action Plan. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish and enforce controls over administration of CFP?s to ensure safe, sanitary, and affordable dwellings are maintained for the purpose of serving families of low-income status in accordance with 24 CFR section 905. ? Views of Responsible Officials and Planned Corrective Actions: We will review existing control procedures to correct these deficiencies. We are currently working with contractors to complete improvement projects in a timely manner. We will also provide increased supervision and training over the administration of Capital Fund Programs. We anticipate a complete resolution of this type of error by December 31, 2022.