FAC Explorer

Audit 314956

FY End
2023-12-31
Total Expended
$1.42M
Findings
6
Programs
3
Organization: Crookston Housing and Economic Development Authority (MN)
Year: 2023 Accepted: 2024-07-11
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
478276 2023-002 Material Weakness Yes B
478277 2023-003 Significant Deficiency Yes E
478278 2023-004 Significant Deficiency Yes L
1054718 2023-002 Material Weakness Yes B
1054719 2023-003 Significant Deficiency Yes E
1054720 2023-004 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $997,944 Yes 3
14.872 Public Housing Capital Fund $237,869 - 0
14.850 Public and Indian Housing $183,062 - 0

Contacts

Name Title Type
UG2AQKJ4KCK5 Karie Kirschbaum Auditee
2182803049 Brian Opsahl Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the accompanying schedule of expenditures of federal awards (the “Schedule”) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Crookston Housing and Economic Development Authority has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Schedule includes the federal award activity of the Crookston Housing and Economic Development Authority under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority.

Finding Details

Finding 2023-002
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Allowable Costs/Cost Principles Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Material Weakness Criteria Amounts paid under the Section 8 Vouchers Program must meet allowable costs/cost principles per HUD’s annual guidance. Condition During our testing of disbursements, we noted 21 instances of the Authority not having documentation to support an allocation of costs to the vouchers program. Questioned Costs Undeterminable. Context We reviewed a random sample of twenty-four disbursements from the Section 8 Vouchers Program. Effect The allocated costs to the Section 8 Vouchers Program were undeterminable due to the fact that no documentation support for the allocation was provided. Cause The Authority experienced turnover in the Section 8 program. As a result, allocation documentations were not saved as the previous year allocations were used. Repeat Finding This is a repeat of finding 2022-002. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with adequate documentation. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2023-003
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Eligibility for Individuals Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Significant Deficiency Criteria The PHA must obtain and document in the family file third party verification of reported family annual income; the value of assets; expenses related to deductions from annual income; and other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). Condition During our testing of nineteen tenant files, we noted that three files had income calculation errors. Questioned Costs Undeterminable Context We reviewed a random sample of nineteen out of 189 tenant files for a tenant’s HAP amount. Effect The income verified was not appropriately used for determining the tenant’s income. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper documentation. Repeat Finding This is a repeat of finding 2022-003. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with special tests requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2023-004
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Reporting – Voucher for Payment of Annual Contributions and Operating Statement Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Significant Deficiency Criteria The Authority is required to submit the Voucher for Payment of Annual Contributions and Operating Statement report monthly to HUD via the Voucher Management System (VMS). Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the Voucher for Payment of Annual Contribution and Operating Statement using VMS. Questioned Costs None. Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper reporting. Repeat Finding This is a repeat of finding 2022-004. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with reporting requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2023-002
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Allowable Costs/Cost Principles Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Material Weakness Criteria Amounts paid under the Section 8 Vouchers Program must meet allowable costs/cost principles per HUD’s annual guidance. Condition During our testing of disbursements, we noted 21 instances of the Authority not having documentation to support an allocation of costs to the vouchers program. Questioned Costs Undeterminable. Context We reviewed a random sample of twenty-four disbursements from the Section 8 Vouchers Program. Effect The allocated costs to the Section 8 Vouchers Program were undeterminable due to the fact that no documentation support for the allocation was provided. Cause The Authority experienced turnover in the Section 8 program. As a result, allocation documentations were not saved as the previous year allocations were used. Repeat Finding This is a repeat of finding 2022-002. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with adequate documentation. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2023-003
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Eligibility for Individuals Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Significant Deficiency Criteria The PHA must obtain and document in the family file third party verification of reported family annual income; the value of assets; expenses related to deductions from annual income; and other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). Condition During our testing of nineteen tenant files, we noted that three files had income calculation errors. Questioned Costs Undeterminable Context We reviewed a random sample of nineteen out of 189 tenant files for a tenant’s HAP amount. Effect The income verified was not appropriately used for determining the tenant’s income. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper documentation. Repeat Finding This is a repeat of finding 2022-003. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with special tests requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2023-004
Federal Program – Section 8 Housing Choice Voucher Program AL #14.871 – Reporting – Voucher for Payment of Annual Contributions and Operating Statement Federal Program Section 8 Housing Choice Vouchers AL #14.871 – Significant Deficiency Criteria The Authority is required to submit the Voucher for Payment of Annual Contributions and Operating Statement report monthly to HUD via the Voucher Management System (VMS). Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the Voucher for Payment of Annual Contribution and Operating Statement using VMS. Questioned Costs None. Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper reporting. Repeat Finding This is a repeat of finding 2022-004. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority’s compliance with reporting requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.