FAC Explorer

Audit 345336

FY End
2024-06-30
Total Expended
$4.75M
Findings
4
Programs
4
Organization: Pembroke Housing Authority (NC)
Year: 2024 Accepted: 2025-03-10
Auditor: Cbiz CPAS PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
526407 2024-002 Significant Deficiency Yes A
526408 2024-002 Significant Deficiency Yes A
1102849 2024-002 Significant Deficiency Yes A
1102850 2024-002 Significant Deficiency Yes A

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $2.81M Yes 1
14.850 Public Housing Operating Fund $177,481 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $68,770 - 0
14.872 Public Housing Capital Fund $68,550 - 0

Contacts

Name Title Type
CUQYHEKU9BM3 John McKeown Auditee
7812933088 Michael Guyder Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: NOTE 1 – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Pembroke Housing Authority, under programs of the federal government for the year ended June 30, 2024. 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 Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Pembroke Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Pembroke Housing Authority. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the schedule are reported on the accrual basis of accounting. For cost-reimbursement awards, 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. For performance-based awards, expenditures reported represent amounts earned. De Minimis Rate Used: N Rate Explanation: The Pembroke Housing Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Pembroke Housing Authority, under programs of the federal government for the year ended June 30, 2024. 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 Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Pembroke Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Pembroke Housing Authority.
Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: NOTE 1 – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Pembroke Housing Authority, under programs of the federal government for the year ended June 30, 2024. 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 Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Pembroke Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Pembroke Housing Authority. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the schedule are reported on the accrual basis of accounting. For cost-reimbursement awards, 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. For performance-based awards, expenditures reported represent amounts earned. De Minimis Rate Used: N Rate Explanation: The Pembroke Housing Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the schedule are reported on the accrual basis of accounting. For cost-reimbursement awards, 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. For performance-based awards, expenditures reported represent amounts earned.
Title: NOTE 3 – INDIRECT COST RATE Accounting Policies: NOTE 1 – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Pembroke Housing Authority, under programs of the federal government for the year ended June 30, 2024. 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 Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Pembroke Housing Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of Pembroke Housing Authority. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the schedule are reported on the accrual basis of accounting. For cost-reimbursement awards, 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. For performance-based awards, expenditures reported represent amounts earned. De Minimis Rate Used: N Rate Explanation: The Pembroke Housing Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Pembroke Housing Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2024-002
2024-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 449 instances where a check signature stamp was used and 20 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 869 checks from these 2 accounts of which 469 did not follow their policy regarding authorized check signers. This was identified in March 2024. Subsequent to March 2024, we did not identify any instances of checks with only 1 signature or the use of the check stamp. REPEAT FINDING See finding 2023-002. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2024-002
2024-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 449 instances where a check signature stamp was used and 20 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 869 checks from these 2 accounts of which 469 did not follow their policy regarding authorized check signers. This was identified in March 2024. Subsequent to March 2024, we did not identify any instances of checks with only 1 signature or the use of the check stamp. REPEAT FINDING See finding 2023-002. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2024-002
2024-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 449 instances where a check signature stamp was used and 20 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 869 checks from these 2 accounts of which 469 did not follow their policy regarding authorized check signers. This was identified in March 2024. Subsequent to March 2024, we did not identify any instances of checks with only 1 signature or the use of the check stamp. REPEAT FINDING See finding 2023-002. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
Finding 2024-002
2024-002 – ACTIVITIES ALLOWED OR UNALLOWED Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Choice Voucher Program CRITERIA The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable. CONDITION We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 449 instances where a check signature stamp was used and 20 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board. CAUSE The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient. EFFECT As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made. QUESTIONED COSTS None Identified. CONTEXT The Authority processed 869 checks from these 2 accounts of which 469 did not follow their policy regarding authorized check signers. This was identified in March 2024. Subsequent to March 2024, we did not identify any instances of checks with only 1 signature or the use of the check stamp. REPEAT FINDING See finding 2023-002. RECOMMENDATION We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.