FAC Explorer

Audit 331370

FY End
2024-03-31
Total Expended
$36.09M
Findings
4
Programs
8
Organization: Somerville Housing Authority (MA)
Year: 2024 Accepted: 2024-12-09
Auditor: Rector Reeder & Lofton PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
513486 2024-001 Significant Deficiency Yes E
513487 2024-001 Significant Deficiency Yes E
1089928 2024-001 Significant Deficiency Yes E
1089929 2024-001 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $25.32M Yes 1
14.182 Section 8 New Construction and Substantial Rehabilitation $3.33M Yes 0
14.850 Public and Indian Housing $3.23M Yes 0
14.879 Mainstream Vouchers $2.50M Yes 1
14.872 Public Housing Capital Fund $1.29M Yes 0
14.896 Family Self-Sufficiency Program $239,984 - 0
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $112,721 Yes 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $59,400 - 0

Contacts

Name Title Type
HKNFBGSHG2H3 Arnaldo Velazquez Auditee
6176251152 Dale R. Rector Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION 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. 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: The Authority did not elect to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the Authority under programs of the federal government for the year ended March 31, 2024. 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 assets, or cash flows of the Authority.
Title: SUBRECIPIENTS 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. 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: The Authority did not elect to use the 10% de minimis cost rate. The Authority provided no federal awards to subrecipients during the fiscal year ending March 31, 2024.
Title: DISCLOSURE OF OTHER FORMS OF ASSISTANCE 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. 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: The Authority did not elect to use the 10% de minimis cost rate. The Authority received no federal awards to subrecipients during the fiscal year ended March 31, 2024. The Authority had no loans outstanding which were guaranteed, and therefore, qualify as part of the federal financial assistance. The Authority maintains the following limits of insurance as of March 31, 2024: Property $133,996,482 Liability $1,000,000 Workers Comp $1,000,000 Employee Fraud and Dishonesty $250,000 Flood $250,000 Settled claims have not exceeded the above commercial insurance coverage limits over the past three years.

Finding Details

Finding 2024-001
Finding 2024-001- Housing Choice Voucher Tenant Files- Eligibility- Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster -ALN 14.871 and 14.879 Condition: We reviewed sixty-five (65) tenant files from the HCV and Mainstream programs. We noted eight (8) files, or 12% of our sample, with instances of noncompliance related to adjusted annual income. Of these, two (2) files were missing proper income verification, five (5) files contained miscalculations of income, and one (1) file was missing deduction verification. We were able to numerically extrapolate these errors to the population and found the potential misstatement to be immaterial to program HAP expense. We believe the Authority has a significant deficiency in control in this area of compliance. Cause: We noted that the Leased Housing department was severely understaffed for a large portion of the fiscal year. The Authority contracted with a third-party vendor for assistance in processing reexaminations during this time. We believe the difficulty in hiring, training, and retaining quality staff to have been a contributing factor to the deficiencies. Criteria: The Code of Federal Regulations, the Authority's Administrative Plan, and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper verification and documentation of tenant reexaminations can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine the extent of the deficiencies. We also recommend that the Authority implement more extensive quality control reviews to adequately monitor compliance with regulations pertaining to the maintenance of tenant files. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.
Finding 2024-001
Finding 2024-001- Housing Choice Voucher Tenant Files- Eligibility- Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster -ALN 14.871 and 14.879 Condition: We reviewed sixty-five (65) tenant files from the HCV and Mainstream programs. We noted eight (8) files, or 12% of our sample, with instances of noncompliance related to adjusted annual income. Of these, two (2) files were missing proper income verification, five (5) files contained miscalculations of income, and one (1) file was missing deduction verification. We were able to numerically extrapolate these errors to the population and found the potential misstatement to be immaterial to program HAP expense. We believe the Authority has a significant deficiency in control in this area of compliance. Cause: We noted that the Leased Housing department was severely understaffed for a large portion of the fiscal year. The Authority contracted with a third-party vendor for assistance in processing reexaminations during this time. We believe the difficulty in hiring, training, and retaining quality staff to have been a contributing factor to the deficiencies. Criteria: The Code of Federal Regulations, the Authority's Administrative Plan, and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper verification and documentation of tenant reexaminations can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine the extent of the deficiencies. We also recommend that the Authority implement more extensive quality control reviews to adequately monitor compliance with regulations pertaining to the maintenance of tenant files. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.
Finding 2024-001
Finding 2024-001- Housing Choice Voucher Tenant Files- Eligibility- Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster -ALN 14.871 and 14.879 Condition: We reviewed sixty-five (65) tenant files from the HCV and Mainstream programs. We noted eight (8) files, or 12% of our sample, with instances of noncompliance related to adjusted annual income. Of these, two (2) files were missing proper income verification, five (5) files contained miscalculations of income, and one (1) file was missing deduction verification. We were able to numerically extrapolate these errors to the population and found the potential misstatement to be immaterial to program HAP expense. We believe the Authority has a significant deficiency in control in this area of compliance. Cause: We noted that the Leased Housing department was severely understaffed for a large portion of the fiscal year. The Authority contracted with a third-party vendor for assistance in processing reexaminations during this time. We believe the difficulty in hiring, training, and retaining quality staff to have been a contributing factor to the deficiencies. Criteria: The Code of Federal Regulations, the Authority's Administrative Plan, and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper verification and documentation of tenant reexaminations can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine the extent of the deficiencies. We also recommend that the Authority implement more extensive quality control reviews to adequately monitor compliance with regulations pertaining to the maintenance of tenant files. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.
Finding 2024-001
Finding 2024-001- Housing Choice Voucher Tenant Files- Eligibility- Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster -ALN 14.871 and 14.879 Condition: We reviewed sixty-five (65) tenant files from the HCV and Mainstream programs. We noted eight (8) files, or 12% of our sample, with instances of noncompliance related to adjusted annual income. Of these, two (2) files were missing proper income verification, five (5) files contained miscalculations of income, and one (1) file was missing deduction verification. We were able to numerically extrapolate these errors to the population and found the potential misstatement to be immaterial to program HAP expense. We believe the Authority has a significant deficiency in control in this area of compliance. Cause: We noted that the Leased Housing department was severely understaffed for a large portion of the fiscal year. The Authority contracted with a third-party vendor for assistance in processing reexaminations during this time. We believe the difficulty in hiring, training, and retaining quality staff to have been a contributing factor to the deficiencies. Criteria: The Code of Federal Regulations, the Authority's Administrative Plan, and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper verification and documentation of tenant reexaminations can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine the extent of the deficiencies. We also recommend that the Authority implement more extensive quality control reviews to adequately monitor compliance with regulations pertaining to the maintenance of tenant files. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.