FAC Explorer

Audit 323042

FY End
2023-12-31
Total Expended
$2.39M
Findings
6
Programs
4
Organization: Housing Authority of the City of New Bern (NC)
Year: 2023 Accepted: 2024-09-30
Auditor: Rubino & Company Chartered

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
500257 2023-001 Material Weakness - B
500258 2023-002 Significant Deficiency - N
500259 2023-003 Significant Deficiency - I
1076699 2023-001 Material Weakness - B
1076700 2023-002 Significant Deficiency - N
1076701 2023-003 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
14.872 Public Housing Capital Fund $1.08M Yes 3
14.U82 Section 8 New Construction Sub Rehab $673,808 - 0
14.850 Public Housing Operating Fund $552,645 - 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $79,135 - 0

Contacts

Name Title Type
ZCH6TZ7W1XQ1 Reginal Barner Auditee
2526330800 Allan Kitchen Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on 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. De Minimis Rate Used: N Rate Explanation: NOTE 3 INDIRECT COST RATE The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Housing Authority of the City of New Bern (the 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 US 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 2023-001
Finding No. 2023-001: Fraudulent Payroll Activities Resulting in Theft (Material Weakness) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Allowable Costs Criteria: The Authority should maintain appropriate controls over the payroll process to prevent and/or detect fraud in a timely manner. Condition: The Authority did not have adequate controls over the payroll process, resulting in an employee authorizing excess salary disbursements in an act of fraudulent theft. Context: Costs are considered allowable assuming they are reasonable for the performance of the federal program and are approved by an authorized official. Effect: The Authority allowed for employee to disburse excess salary in an act of fraudulent theft. Cause: The Authority did not have the appropriate controls over the payroll process to prevent and/or detect fraud in a timely manner. Questioned Costs: $18,931 Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that fraud is prevented and/or detected in a timely manner. Views of Responsible Officials: The Authority agrees with the finding.
Finding 2023-002
Finding No. 2023-002: Obligation Requirement for Capital Fund Program Drawdowns (Significant Deficiency Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Special Tests and Provisions Criteria: Per HUD regulations, Capital Fund Program costs are required to be obligated within 24 months of the execution of the grant with documentation showing the funds were truly obligated. Condition: The Authority did not have adequate controls over the obligation process, resulting in Capital Funds obligated in HUD’s eLOCCS without obligating the funds. Context: The Authority had two Capital Fund grants with obligation deadlines during the year, and both did not have the proper documentation. Effect: The Authority did not appropriately obligate the CFP funds by the deadline. Cause: The Authority did not have the appropriate controls over the obligation process to obligate the funds by the deadline. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that funds are obligated in a timely manner. Views of Responsible Officials: The Authority agrees with the finding.
Finding 2023-003
Finding No. 2023-003: Missing Procurement Documentation (Significant Deficiency) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Procurement Criteria: Per HUD regulations, the Authority is required to follow 2 CFR regulations on procuring goods and services. Condition: The Authority did not have adequate controls over the procurement process, resulting in missing procurement documentation. Context: The Authority had three new contracts entered into during year; we reviewed two and identified missing procurement documentation. Effect: The Authority did not procure goods and services properly under the required regulations. Cause: The Authority did not have the appropriate controls over the procurement process to maintain proper documentation. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that the procurement process includes the required documentation. Views of Responsible Officials: The Authority agrees with the finding.
Finding 2023-001
Finding No. 2023-001: Fraudulent Payroll Activities Resulting in Theft (Material Weakness) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Allowable Costs Criteria: The Authority should maintain appropriate controls over the payroll process to prevent and/or detect fraud in a timely manner. Condition: The Authority did not have adequate controls over the payroll process, resulting in an employee authorizing excess salary disbursements in an act of fraudulent theft. Context: Costs are considered allowable assuming they are reasonable for the performance of the federal program and are approved by an authorized official. Effect: The Authority allowed for employee to disburse excess salary in an act of fraudulent theft. Cause: The Authority did not have the appropriate controls over the payroll process to prevent and/or detect fraud in a timely manner. Questioned Costs: $18,931 Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that fraud is prevented and/or detected in a timely manner. Views of Responsible Officials: The Authority agrees with the finding.
Finding 2023-002
Finding No. 2023-002: Obligation Requirement for Capital Fund Program Drawdowns (Significant Deficiency Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Special Tests and Provisions Criteria: Per HUD regulations, Capital Fund Program costs are required to be obligated within 24 months of the execution of the grant with documentation showing the funds were truly obligated. Condition: The Authority did not have adequate controls over the obligation process, resulting in Capital Funds obligated in HUD’s eLOCCS without obligating the funds. Context: The Authority had two Capital Fund grants with obligation deadlines during the year, and both did not have the proper documentation. Effect: The Authority did not appropriately obligate the CFP funds by the deadline. Cause: The Authority did not have the appropriate controls over the obligation process to obligate the funds by the deadline. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that funds are obligated in a timely manner. Views of Responsible Officials: The Authority agrees with the finding.
Finding 2023-003
Finding No. 2023-003: Missing Procurement Documentation (Significant Deficiency) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Procurement Criteria: Per HUD regulations, the Authority is required to follow 2 CFR regulations on procuring goods and services. Condition: The Authority did not have adequate controls over the procurement process, resulting in missing procurement documentation. Context: The Authority had three new contracts entered into during year; we reviewed two and identified missing procurement documentation. Effect: The Authority did not procure goods and services properly under the required regulations. Cause: The Authority did not have the appropriate controls over the procurement process to maintain proper documentation. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that the procurement process includes the required documentation. Views of Responsible Officials: The Authority agrees with the finding.