2022-001 - Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Criteria: Management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. The Authority should have adequate internal controls in place to allow for timely and accurate financial reporting within a short time frame following the Authority?s year end and without auditor adjustment. Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Cause: Accounting personnel, being relatively new to the Authority, did not have adequate training or experience to prepare accurate financial reporting information in a timely manner Effect: Accurate and timely financials are not provided to those charged with governance and material audit adjustments were required to correct the financial statements. Questioned Costs: None. Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures and will engage the outside fee accountant to assist with all programs.
2022-002 ? Activities Allowed or Unallowed: Loans to Related Parties Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-002 (Originally reported as finding 2019-005 and 2019-010 at 09/30/19) Criteria: 24 CFR 990.280(b) permits the use of Public and Indian Housing Program (PIH) for specific project related operating expenses. It does not permit such amounts to be loaned to related parties. Condition: In prior years, the Authority had loaned PIH monies to related parties. As of September 30, 2022, approximately $209,000 of PIH loans remain outstanding to related parties and approximately $127,000 to other programs of the Authority. Cause: Management of the Authority in prior years (who were different individuals than the current management of the Authority) either did not understand or did not follow federal guidelines. Effect: PIH monies were used for unallowed purposes. Questioned Costs: None. Recommendation: Management of the Authority should continue to pursue collections of these amounts. Views of Responsible Officials of the Auditee: Current management of the Authority understands these federal guidelines, has stopped any further loans of PIH monies to related parties or other programs and is actively pursuing collection efforts.
2022-004 - Eligibility ? Tenant Files Public and Indian Housing Program ? CFDA Number 14.850 Significant Deficiency in Internal Control, Other Matters Required to be Reported Repeat of 9/30/21 Finding 2021-003 (originally reported at 9/30/19 as Finding 2019-009) Criteria: As a condition of admission or continued occupancy, the tenant and other family members are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). For both initial income examinations and reexaminations, the Authority must obtain and document in the family file third-party verification of (1) reported family annual income, (2) the value of assets, (3) expenses related to deductions from annual income, and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). Condition: Out of a total tenant population of approximately 141 tenants, 15 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 tenant file where the tenant?s flat rent was overstated by $4 due to a miscalculation. ? 1 tenant file where the tenant?s flat rent was overstated by $2 due to a miscalculation. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to increase by $6. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to decrease by $63 ? 1 tenant file where the tenant?s General Assistance was coded as wages on the 50058 form. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.
2022-001 - Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Criteria: Management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. The Authority should have adequate internal controls in place to allow for timely and accurate financial reporting within a short time frame following the Authority?s year end and without auditor adjustment. Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Cause: Accounting personnel, being relatively new to the Authority, did not have adequate training or experience to prepare accurate financial reporting information in a timely manner Effect: Accurate and timely financials are not provided to those charged with governance and material audit adjustments were required to correct the financial statements. Questioned Costs: None. Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures and will engage the outside fee accountant to assist with all programs.
2022-002 ? Activities Allowed or Unallowed: Loans to Related Parties Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-002 (Originally reported as finding 2019-005 and 2019-010 at 09/30/19) Criteria: 24 CFR 990.280(b) permits the use of Public and Indian Housing Program (PIH) for specific project related operating expenses. It does not permit such amounts to be loaned to related parties. Condition: In prior years, the Authority had loaned PIH monies to related parties. As of September 30, 2022, approximately $209,000 of PIH loans remain outstanding to related parties and approximately $127,000 to other programs of the Authority. Cause: Management of the Authority in prior years (who were different individuals than the current management of the Authority) either did not understand or did not follow federal guidelines. Effect: PIH monies were used for unallowed purposes. Questioned Costs: None. Recommendation: Management of the Authority should continue to pursue collections of these amounts. Views of Responsible Officials of the Auditee: Current management of the Authority understands these federal guidelines, has stopped any further loans of PIH monies to related parties or other programs and is actively pursuing collection efforts.
2022-004 - Eligibility ? Tenant Files Public and Indian Housing Program ? CFDA Number 14.850 Significant Deficiency in Internal Control, Other Matters Required to be Reported Repeat of 9/30/21 Finding 2021-003 (originally reported at 9/30/19 as Finding 2019-009) Criteria: As a condition of admission or continued occupancy, the tenant and other family members are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). For both initial income examinations and reexaminations, the Authority must obtain and document in the family file third-party verification of (1) reported family annual income, (2) the value of assets, (3) expenses related to deductions from annual income, and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). Condition: Out of a total tenant population of approximately 141 tenants, 15 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 tenant file where the tenant?s flat rent was overstated by $4 due to a miscalculation. ? 1 tenant file where the tenant?s flat rent was overstated by $2 due to a miscalculation. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to increase by $6. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to decrease by $63 ? 1 tenant file where the tenant?s General Assistance was coded as wages on the 50058 form. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.
2022-003 - Eligibility ? Tenant Files Section 8 Housing Choice Vouchers ? CFDA Number 14.871 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-005 (Originally reported as finding 2020-005 at 09/30/20) Criteria: As a condition of assisted tenancy, the landlord and tenant must execute the lease agreement and tenancy addendum prior to the initial term of the lease, and the public housing authority must execute the HAP contract within 60 days from the beginning of the lease term (24 CFR 982.305). In addition, the tenant must submit to the public housing authority a request for approval of tenancy and a copy of the lease during the term of the voucher (24 CFR 982.302). Condition: Out of a total tenant population of approximately 884 leased vouchers, 25 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 error where the lease agreement was not signed by the owner ? 1 error where the file did not contain a signed lease agreement ? 1 error where the file did not contain a signed HAP contract. Also, during our New Admissions testing (11 tested out of 108 new admissions) we noted the following: ? 1 error where the HAP contract was signed but not dated by the Authority. ? 1 error where the lease agreement was not signed by the owner. ? 4 errors where the RFTA was signed but not dated by the landlord and/or by the tenant. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with the assisted tenancy requirements. The HAP contract is void if the Authority is unable to obtain an executed lease agreement and tenancy addendum prior to the initial term of the lease. Also, the HAP contract is void if an executed HAP contract is not obtained within 60 days from the beginning of the lease term. In addition, the HAP contract is void if the request for approval of tenancy and copy of the lease is submitted after the lease term (including extensions). As such, the tenant would not meet the eligibility requirements to be housed. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.
2022-001 - Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Criteria: Management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. The Authority should have adequate internal controls in place to allow for timely and accurate financial reporting within a short time frame following the Authority?s year end and without auditor adjustment. Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Cause: Accounting personnel, being relatively new to the Authority, did not have adequate training or experience to prepare accurate financial reporting information in a timely manner Effect: Accurate and timely financials are not provided to those charged with governance and material audit adjustments were required to correct the financial statements. Questioned Costs: None. Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures and will engage the outside fee accountant to assist with all programs.
2022-002 ? Activities Allowed or Unallowed: Loans to Related Parties Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-002 (Originally reported as finding 2019-005 and 2019-010 at 09/30/19) Criteria: 24 CFR 990.280(b) permits the use of Public and Indian Housing Program (PIH) for specific project related operating expenses. It does not permit such amounts to be loaned to related parties. Condition: In prior years, the Authority had loaned PIH monies to related parties. As of September 30, 2022, approximately $209,000 of PIH loans remain outstanding to related parties and approximately $127,000 to other programs of the Authority. Cause: Management of the Authority in prior years (who were different individuals than the current management of the Authority) either did not understand or did not follow federal guidelines. Effect: PIH monies were used for unallowed purposes. Questioned Costs: None. Recommendation: Management of the Authority should continue to pursue collections of these amounts. Views of Responsible Officials of the Auditee: Current management of the Authority understands these federal guidelines, has stopped any further loans of PIH monies to related parties or other programs and is actively pursuing collection efforts.
2022-004 - Eligibility ? Tenant Files Public and Indian Housing Program ? CFDA Number 14.850 Significant Deficiency in Internal Control, Other Matters Required to be Reported Repeat of 9/30/21 Finding 2021-003 (originally reported at 9/30/19 as Finding 2019-009) Criteria: As a condition of admission or continued occupancy, the tenant and other family members are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). For both initial income examinations and reexaminations, the Authority must obtain and document in the family file third-party verification of (1) reported family annual income, (2) the value of assets, (3) expenses related to deductions from annual income, and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). Condition: Out of a total tenant population of approximately 141 tenants, 15 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 tenant file where the tenant?s flat rent was overstated by $4 due to a miscalculation. ? 1 tenant file where the tenant?s flat rent was overstated by $2 due to a miscalculation. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to increase by $6. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to decrease by $63 ? 1 tenant file where the tenant?s General Assistance was coded as wages on the 50058 form. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.
2022-001 - Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Criteria: Management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. The Authority should have adequate internal controls in place to allow for timely and accurate financial reporting within a short time frame following the Authority?s year end and without auditor adjustment. Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Cause: Accounting personnel, being relatively new to the Authority, did not have adequate training or experience to prepare accurate financial reporting information in a timely manner Effect: Accurate and timely financials are not provided to those charged with governance and material audit adjustments were required to correct the financial statements. Questioned Costs: None. Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures and will engage the outside fee accountant to assist with all programs.
2022-002 ? Activities Allowed or Unallowed: Loans to Related Parties Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-002 (Originally reported as finding 2019-005 and 2019-010 at 09/30/19) Criteria: 24 CFR 990.280(b) permits the use of Public and Indian Housing Program (PIH) for specific project related operating expenses. It does not permit such amounts to be loaned to related parties. Condition: In prior years, the Authority had loaned PIH monies to related parties. As of September 30, 2022, approximately $209,000 of PIH loans remain outstanding to related parties and approximately $127,000 to other programs of the Authority. Cause: Management of the Authority in prior years (who were different individuals than the current management of the Authority) either did not understand or did not follow federal guidelines. Effect: PIH monies were used for unallowed purposes. Questioned Costs: None. Recommendation: Management of the Authority should continue to pursue collections of these amounts. Views of Responsible Officials of the Auditee: Current management of the Authority understands these federal guidelines, has stopped any further loans of PIH monies to related parties or other programs and is actively pursuing collection efforts.
2022-004 - Eligibility ? Tenant Files Public and Indian Housing Program ? CFDA Number 14.850 Significant Deficiency in Internal Control, Other Matters Required to be Reported Repeat of 9/30/21 Finding 2021-003 (originally reported at 9/30/19 as Finding 2019-009) Criteria: As a condition of admission or continued occupancy, the tenant and other family members are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). For both initial income examinations and reexaminations, the Authority must obtain and document in the family file third-party verification of (1) reported family annual income, (2) the value of assets, (3) expenses related to deductions from annual income, and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). Condition: Out of a total tenant population of approximately 141 tenants, 15 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 tenant file where the tenant?s flat rent was overstated by $4 due to a miscalculation. ? 1 tenant file where the tenant?s flat rent was overstated by $2 due to a miscalculation. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to increase by $6. ? 1 tenant file where the tenant?s income was miscalculated. Correcting this error caused the tenant?s rent to decrease by $63 ? 1 tenant file where the tenant?s General Assistance was coded as wages on the 50058 form. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.
2022-003 - Eligibility ? Tenant Files Section 8 Housing Choice Vouchers ? CFDA Number 14.871 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-005 (Originally reported as finding 2020-005 at 09/30/20) Criteria: As a condition of assisted tenancy, the landlord and tenant must execute the lease agreement and tenancy addendum prior to the initial term of the lease, and the public housing authority must execute the HAP contract within 60 days from the beginning of the lease term (24 CFR 982.305). In addition, the tenant must submit to the public housing authority a request for approval of tenancy and a copy of the lease during the term of the voucher (24 CFR 982.302). Condition: Out of a total tenant population of approximately 884 leased vouchers, 25 files were selected for testing in a statistically valid sample. Exceptions were noted as follows: ? 1 error where the lease agreement was not signed by the owner ? 1 error where the file did not contain a signed lease agreement ? 1 error where the file did not contain a signed HAP contract. Also, during our New Admissions testing (11 tested out of 108 new admissions) we noted the following: ? 1 error where the HAP contract was signed but not dated by the Authority. ? 1 error where the lease agreement was not signed by the owner. ? 4 errors where the RFTA was signed but not dated by the landlord and/or by the tenant. Cause: Compliance with all of the HUD requirements was not being carefully followed and the Authority lacked procedures for proper oversight and review of employees performing these compliance procedures. Effect: The Authority is not in compliance with the assisted tenancy requirements. The HAP contract is void if the Authority is unable to obtain an executed lease agreement and tenancy addendum prior to the initial term of the lease. Also, the HAP contract is void if an executed HAP contract is not obtained within 60 days from the beginning of the lease term. In addition, the HAP contract is void if the request for approval of tenancy and copy of the lease is submitted after the lease term (including extensions). As such, the tenant would not meet the eligibility requirements to be housed. Questioned Costs: None. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures.