Audit 346789

Finding 2024-004: Activities Allowed Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Activities Allowed Repeat Finding 2023-006 Criteria: In the Housing Choice Voucher program, the transfers of HAP, and associated administrative fees, even temporarily, to support another program or use are not allowed and could be considered a breach of the annual contributions contract. The Authority should further have documented internal control procedures in place to ensure all cost incurred are allowable such as budgetary controls and Board member review of the actual expenses. Condition: The Authority transitioned from the Public Housing program paying all the bills to the Housing Choice Voucher program paying all of the operating expenses of the Authority after the Public Housing properties were disposed to Green Roof Properties. The expenses are allocated on the general ledgers between all programs which creates interfund receivable/payable balances. It was noted in the prior year audit the Authority did not have a system in place to reimburse these funds timely. We noted at June 30, 2024, the Housing Choice Voucher program was owed $25,469.20 from Green Roof Properties as the Authority did not have a system in place to reimburse shared expenses monthly. An important element of the internal control structure is for the Authority to adopt an operating budget for the Housing Choice Voucher program. This sets the expected expense levels for the program with the goal of maintaining financial viability and assists in identifying errors. The Authority should have procedures in place to compare actual results to the budget and take action as necessary. We noted the Authority did not have an operating budget for the Housing Choice Voucher program for the year ending June 30, 2024 and has not adopted a budget for the program as of June 30, 2025 as of the audit fieldwork date. We further noted there was not documented review of the expenses in the Housing Choice Program although expenses are approved as a whole in the Board minutes. Due to the limited staff size of the Authority, documented oversight is important to ensure all costs incurred are allowable. The Authority indicated in its Summary Schedule of Prior Audit Findings that the finding was corrected. Cause: The Authority has not adequately reviewed and adopted internal control procedures over allowable costs. Effect or Potential Effect: The Authority was in noncompliance with the regulations regarding temporary loans to other Authority programs and does not have adequate documented controls over allowable costs. Recommendation: The Authority should adopt procedures to reimburse shared expenses timely. The Authority should also establish internal controls and procedures to adopt an operating budget annually for the Voucher program. The operating budget should included with its monthly financial reports for a comparison of actual to budgeted figures. Further, the Authority should review and adopt internal controls and procedures to ensure all costs incurred by the Housing Choice Voucher program are allowable. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2024-005: Financial Data Schedule Housing Choice Voucher – 14.871 Material Weakness/Noncompliance - Reporting Criteria: Financial Assessment Sub¬system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The unaudited submission is due 60 days after the fiscal year end. Condition: The Authority’s unaudited submission was due August 30, 2024 and was not submitted until September 30, 2024. Cause: The Authority utilizes a fee accountant to perform this function on its behalf. The monthly accounting during the year was behind and did not allow for the Authority to complete the unaudited submission by the deadline. Effect or Potential Effect: The Authority was in noncompliance with filing its unaudited information to REAC by the deadline.   Recommendation: The Authority should make an effort to have timely monthly financial reports which would allow it to be able to close its year end in a more timely fashion and would allow for the Authority to report to REAC by the deadline. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2024-004: Activities Allowed Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Activities Allowed Repeat Finding 2023-006 Criteria: In the Housing Choice Voucher program, the transfers of HAP, and associated administrative fees, even temporarily, to support another program or use are not allowed and could be considered a breach of the annual contributions contract. The Authority should further have documented internal control procedures in place to ensure all cost incurred are allowable such as budgetary controls and Board member review of the actual expenses. Condition: The Authority transitioned from the Public Housing program paying all the bills to the Housing Choice Voucher program paying all of the operating expenses of the Authority after the Public Housing properties were disposed to Green Roof Properties. The expenses are allocated on the general ledgers between all programs which creates interfund receivable/payable balances. It was noted in the prior year audit the Authority did not have a system in place to reimburse these funds timely. We noted at June 30, 2024, the Housing Choice Voucher program was owed $25,469.20 from Green Roof Properties as the Authority did not have a system in place to reimburse shared expenses monthly. An important element of the internal control structure is for the Authority to adopt an operating budget for the Housing Choice Voucher program. This sets the expected expense levels for the program with the goal of maintaining financial viability and assists in identifying errors. The Authority should have procedures in place to compare actual results to the budget and take action as necessary. We noted the Authority did not have an operating budget for the Housing Choice Voucher program for the year ending June 30, 2024 and has not adopted a budget for the program as of June 30, 2025 as of the audit fieldwork date. We further noted there was not documented review of the expenses in the Housing Choice Program although expenses are approved as a whole in the Board minutes. Due to the limited staff size of the Authority, documented oversight is important to ensure all costs incurred are allowable. The Authority indicated in its Summary Schedule of Prior Audit Findings that the finding was corrected. Cause: The Authority has not adequately reviewed and adopted internal control procedures over allowable costs. Effect or Potential Effect: The Authority was in noncompliance with the regulations regarding temporary loans to other Authority programs and does not have adequate documented controls over allowable costs. Recommendation: The Authority should adopt procedures to reimburse shared expenses timely. The Authority should also establish internal controls and procedures to adopt an operating budget annually for the Voucher program. The operating budget should included with its monthly financial reports for a comparison of actual to budgeted figures. Further, the Authority should review and adopt internal controls and procedures to ensure all costs incurred by the Housing Choice Voucher program are allowable. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2024-005: Financial Data Schedule Housing Choice Voucher – 14.871 Material Weakness/Noncompliance - Reporting Criteria: Financial Assessment Sub¬system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The unaudited submission is due 60 days after the fiscal year end. Condition: The Authority’s unaudited submission was due August 30, 2024 and was not submitted until September 30, 2024. Cause: The Authority utilizes a fee accountant to perform this function on its behalf. The monthly accounting during the year was behind and did not allow for the Authority to complete the unaudited submission by the deadline. Effect or Potential Effect: The Authority was in noncompliance with filing its unaudited information to REAC by the deadline.   Recommendation: The Authority should make an effort to have timely monthly financial reports which would allow it to be able to close its year end in a more timely fashion and would allow for the Authority to report to REAC by the deadline. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.