FAC Explorer

Audit 334861

FY End
2024-06-30
Total Expended
$25.24M
Findings
6
Programs
6
Organization: St. Clair County Housing Authority (IL)
Year: 2024 Accepted: 2024-12-27
Auditor: Rector Reeder & Lofton PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
516962 2024-002 Material Weakness - E
516963 2024-001 Significant Deficiency Yes E
516964 2024-001 Significant Deficiency Yes E
1093404 2024-002 Material Weakness - E
1093405 2024-001 Significant Deficiency Yes E
1093406 2024-001 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
14.850 Public and Indian Housing $3.96M Yes 1
14.872 Public Housing Capital Fund $3.42M Yes 0
14.871 Section 8 Housing Choice Vouchers $427,775 Yes 1
14.182 Section 8 New Construction and Substantial Rehabilitation $130,196 - 0
14.896 Family Self-Sufficiency Program $67,171 - 0
10.427 Rural Rental Assistance Payments $60,095 - 0

Contacts

Name Title Type
JQ4BJKP5NBD3 Nancy M. Schmidt Auditee
6182773290 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 June 30, 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 June 30, 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 St. Clair County Housing Authority received no federal awards of non-monetary assistance that are required to be disclosed for the year ended June 30, 2024. The St. Clair County Housing Authority had loans outstanding of $12,144, which were guaranteed, and therefore, qualify as part of the federal financial assistance. This loan is disclosed in the Notes to the Financial Statements. The St. Clair County Housing Authority maintains the following limits of insurance as of June 30, 2024: Property $ 25,000,000 Liability $ 5,000,000 Commercial Auto $ 2,000,000 Worker Compensation Statutory Public Officials Liability $ 5,000,000 Employee Dishonesty $ 300,000 Settled claims have not exceeded the above commercial insurance coverage limits over the past three years.

Finding Details

Finding 2024-002
Finding 2024-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance & Material Weakness Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of forty (40) Low Rent Public Housing tenant files identified noncompliance in ten (10) files, or 25% of our sample. All instances of noncompliance were related to the verification and calculation of adjusted annual income. Common errors included: • Failing to properly verify and report income or allowances on the 50058 forms from the Application for Continued Occupancy and/or the EIV system • Using nonconsecutive pay stubs to calculate average gross pay • Conducting improper year-to-date analyses We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. We feel that the conditions are present to potentially have a material impact on the financial statements. Criteria: The Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy (ACOP), and specific HUD guidelines in documenting and maintaining Public Housing tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of rental charges and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the Public Housing program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $49,346. This amount accounts for 2.27% of dwelling rental income. Repeat Finding: No 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 Program – ALN 14.871 and 14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found eight (8) files that were not compliant, representing 12.3% of our audit sample. Nearly all the errors were related to income, specifically failures in properly verifying or calculating tenant income. The most common mistake involved incorrect year-to-date analysis. Additionally, one error occurred due to an annual reexamination conducted without tenant participation. We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. Despite these issues, we extrapolated the total potential misstatement and determined it to be immaterial to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of HAP subsidy and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $94,694. This amount accounts for 0.6% of the total HAP expense and is considered immaterial to the financial statements. 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 Program – ALN 14.871 and 14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found eight (8) files that were not compliant, representing 12.3% of our audit sample. Nearly all the errors were related to income, specifically failures in properly verifying or calculating tenant income. The most common mistake involved incorrect year-to-date analysis. Additionally, one error occurred due to an annual reexamination conducted without tenant participation. We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. Despite these issues, we extrapolated the total potential misstatement and determined it to be immaterial to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of HAP subsidy and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $94,694. This amount accounts for 0.6% of the total HAP expense and is considered immaterial to the financial statements. Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.
Finding 2024-002
Finding 2024-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance & Material Weakness Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of forty (40) Low Rent Public Housing tenant files identified noncompliance in ten (10) files, or 25% of our sample. All instances of noncompliance were related to the verification and calculation of adjusted annual income. Common errors included: • Failing to properly verify and report income or allowances on the 50058 forms from the Application for Continued Occupancy and/or the EIV system • Using nonconsecutive pay stubs to calculate average gross pay • Conducting improper year-to-date analyses We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. We feel that the conditions are present to potentially have a material impact on the financial statements. Criteria: The Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy (ACOP), and specific HUD guidelines in documenting and maintaining Public Housing tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of rental charges and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the Public Housing program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $49,346. This amount accounts for 2.27% of dwelling rental income. Repeat Finding: No 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 Program – ALN 14.871 and 14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found eight (8) files that were not compliant, representing 12.3% of our audit sample. Nearly all the errors were related to income, specifically failures in properly verifying or calculating tenant income. The most common mistake involved incorrect year-to-date analysis. Additionally, one error occurred due to an annual reexamination conducted without tenant participation. We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. Despite these issues, we extrapolated the total potential misstatement and determined it to be immaterial to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of HAP subsidy and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $94,694. This amount accounts for 0.6% of the total HAP expense and is considered immaterial to the financial statements. 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 Program – ALN 14.871 and 14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found eight (8) files that were not compliant, representing 12.3% of our audit sample. Nearly all the errors were related to income, specifically failures in properly verifying or calculating tenant income. The most common mistake involved incorrect year-to-date analysis. Additionally, one error occurred due to an annual reexamination conducted without tenant participation. We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. Despite these issues, we extrapolated the total potential misstatement and determined it to be immaterial to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of HAP subsidy and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $94,694. This amount accounts for 0.6% of the total HAP expense and is considered immaterial to the financial statements. Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.