FAC Explorer

Audit 345910

FY End
2024-06-30
Total Expended
$40.50M
Findings
4
Programs
6
Organization: Lexington-Fayette Urban County Housing Authority (KY)
Year: 2024 Accepted: 2025-03-13
Auditor: Rector Reeder & Lofton PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
526836 2024-001 Significant Deficiency Yes E
526837 2024-001 Significant Deficiency Yes E
1103278 2024-001 Significant Deficiency Yes E
1103279 2024-001 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
14.881 Moving to Work Demonstration Program $30.12M Yes 1
14.879 Mainstream Vouchers $1.25M Yes 0
14.871 Section 8 Housing Choice Vouchers $786,250 Yes 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $245,029 - 0
14.238 Shelter Plus Care $239,510 - 0
14.267 Continuum of Care Program $136,787 - 0

Contacts

Name Title Type
LJFJXL5TKP23 Sean Cooper Auditee
8592815031 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 Lexington-Fayette Urban 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 Lexington-Fayette Urban County Housing Authority had no loans, loan guarantees, or federally restricted endowment funds required to be disclosed for the fiscal year ended June 30, 2024. The Lexington-Fayette Urban County Housing Authority maintains the following limits of insurance as of June 30, 2024: Property $ 100,000,000 Liability $ 2,000,000 Commercial Auto $ 2,000,000 Worker Compensation Statutory Directors of Officers Liability $ 2,000,000 Public Employee Dishonesty $ 500,000 Settled claims have not exceeded the above commercial insurance coverage limits over the past three years.

Finding Details

Finding 2024-001
Finding 2024-001 - Moving To Work Demonstration Tenant Files - Eligibility - Internal Control over Tenant Flies - Noncompliance and Significant Deficiency Moving To Work Demonstration - Subsidy ALN 14.881 Condition & Cause: Our review of two hundred (200) Moving To Work tenant files found that eighteen (18) files were noncompliant, representing 9% of our sample. Some files had multiple compliance issues. Specifically, we identified: • Thirteen (13] files where the annual reexamination was completed or made effective at least two months past the due date. • Four (4) files lacking proper verification of income or deductions. • Three (3) files with miscalculations of annual Income. • Four (4) files missing the EIV. • One (1) file processed for annual reexamination without tenant involvement. Using extrapolation, we concluded that the potential misstatement of subsidy from income miscalculations is immaterial to the financial statements. Criteria: Compliance requirements are outlined in the Code of Federal Regulations, the Housing Authority's Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, Moving To Work (MTW) Plan, and specific HUD guidelines for documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Deficiencies in tenant files can result in lost rental income due to late reexaminations, along with potential overpayments or underpayments by tenants stemming from inaccurate rent determinations. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the MTW program. Recommendation: We recommend that the Agency identify the annual recert1fications that are past or near due and complete these reexaminations. We also recommend that the Agency continue their monitoring and review of the Moving To Work files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. 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 - Moving To Work Demonstration Tenant Files - Eligibility - Internal Control over Tenant Flies - Noncompliance and Significant Deficiency Moving To Work Demonstration - Subsidy ALN 14.881 Condition & Cause: Our review of two hundred (200) Moving To Work tenant files found that eighteen (18) files were noncompliant, representing 9% of our sample. Some files had multiple compliance issues. Specifically, we identified: • Thirteen (13] files where the annual reexamination was completed or made effective at least two months past the due date. • Four (4) files lacking proper verification of income or deductions. • Three (3) files with miscalculations of annual Income. • Four (4) files missing the EIV. • One (1) file processed for annual reexamination without tenant involvement. Using extrapolation, we concluded that the potential misstatement of subsidy from income miscalculations is immaterial to the financial statements. Criteria: Compliance requirements are outlined in the Code of Federal Regulations, the Housing Authority's Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, Moving To Work (MTW) Plan, and specific HUD guidelines for documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Deficiencies in tenant files can result in lost rental income due to late reexaminations, along with potential overpayments or underpayments by tenants stemming from inaccurate rent determinations. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the MTW program. Recommendation: We recommend that the Agency identify the annual recert1fications that are past or near due and complete these reexaminations. We also recommend that the Agency continue their monitoring and review of the Moving To Work files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. 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 - Moving To Work Demonstration Tenant Files - Eligibility - Internal Control over Tenant Flies - Noncompliance and Significant Deficiency Moving To Work Demonstration - Subsidy ALN 14.881 Condition & Cause: Our review of two hundred (200) Moving To Work tenant files found that eighteen (18) files were noncompliant, representing 9% of our sample. Some files had multiple compliance issues. Specifically, we identified: • Thirteen (13] files where the annual reexamination was completed or made effective at least two months past the due date. • Four (4) files lacking proper verification of income or deductions. • Three (3) files with miscalculations of annual Income. • Four (4) files missing the EIV. • One (1) file processed for annual reexamination without tenant involvement. Using extrapolation, we concluded that the potential misstatement of subsidy from income miscalculations is immaterial to the financial statements. Criteria: Compliance requirements are outlined in the Code of Federal Regulations, the Housing Authority's Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, Moving To Work (MTW) Plan, and specific HUD guidelines for documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Deficiencies in tenant files can result in lost rental income due to late reexaminations, along with potential overpayments or underpayments by tenants stemming from inaccurate rent determinations. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the MTW program. Recommendation: We recommend that the Agency identify the annual recert1fications that are past or near due and complete these reexaminations. We also recommend that the Agency continue their monitoring and review of the Moving To Work files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. 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 - Moving To Work Demonstration Tenant Files - Eligibility - Internal Control over Tenant Flies - Noncompliance and Significant Deficiency Moving To Work Demonstration - Subsidy ALN 14.881 Condition & Cause: Our review of two hundred (200) Moving To Work tenant files found that eighteen (18) files were noncompliant, representing 9% of our sample. Some files had multiple compliance issues. Specifically, we identified: • Thirteen (13] files where the annual reexamination was completed or made effective at least two months past the due date. • Four (4) files lacking proper verification of income or deductions. • Three (3) files with miscalculations of annual Income. • Four (4) files missing the EIV. • One (1) file processed for annual reexamination without tenant involvement. Using extrapolation, we concluded that the potential misstatement of subsidy from income miscalculations is immaterial to the financial statements. Criteria: Compliance requirements are outlined in the Code of Federal Regulations, the Housing Authority's Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, Moving To Work (MTW) Plan, and specific HUD guidelines for documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Deficiencies in tenant files can result in lost rental income due to late reexaminations, along with potential overpayments or underpayments by tenants stemming from inaccurate rent determinations. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the MTW program. Recommendation: We recommend that the Agency identify the annual recert1fications that are past or near due and complete these reexaminations. We also recommend that the Agency continue their monitoring and review of the Moving To Work files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. 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.