FAC Explorer

Audit 320526

FY End
2023-12-31
Total Expended
$9.82M
Findings
2
Programs
4
Organization: Housing Authority of the City of Easton (PA)
Year: 2023 Accepted: 2024-09-24
Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
497921 2023-001 Material Weakness Yes N
1074363 2023-001 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $5.64M - 1
14.872 Public Housing Capital Fund $2.06M Yes 0
14.850 Public and Indian Housing $2.01M - 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $119,319 - 0

Contacts

Name Title Type
QNL1V1PJJVS5 Jackie Lopez Auditee
6104384082 Rich Larsen Auditor
No contacts on file

Notes to SEFA

Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the Authority under programs of the federal government for the year ended December 31, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of 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. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: INDIRECT COST RATE The Authority has elected not to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
Finding 2023-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance – N. Special Tests and Provisions - Reasonable Rent Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract)(24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Based upon inspection of the Authority’s files and on discussion with management, there were newly leased units for which rent reasonableness was not performed. Context: There were approximately fifty three (53) newly leased units. Of a sample size of five (5) newly leased units, four (4) unit's documentation of reasonable rent was not available for examination. Our sample size is statistically valid. Known Questioned Costs: $49,713 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2023-001
Finding 2023-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance – N. Special Tests and Provisions - Reasonable Rent Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract)(24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Based upon inspection of the Authority’s files and on discussion with management, there were newly leased units for which rent reasonableness was not performed. Context: There were approximately fifty three (53) newly leased units. Of a sample size of five (5) newly leased units, four (4) unit's documentation of reasonable rent was not available for examination. Our sample size is statistically valid. Known Questioned Costs: $49,713 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.