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Audit 350376

FY End
2024-06-30
Total Expended
$41.56M
Findings
2
Programs
7
Organization: Grand Rapids Housing Commission (MI)
Year: 2024 Accepted: 2025-03-30
Auditor: Berman Hopkins CPAS and Associates LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
540603 2024-001 Significant Deficiency - E
1117045 2024-001 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.881 Moving to Work Demonstration Program $37.56M Yes 1
14.879 Mainstream Vouchers $2.14M - 0
14.871 Section 8 Housing Choice Vouchers $634,363 - 0
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $532,061 - 0
14.877 Public Housing Family Self-Sufficiency Under Resident Opportunity and Supportive Services $432,160 - 0
14.235 Supportive Housing Program $154,754 - 0
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $115,318 - 0

Contacts

Name Title Type
UKW5VBK9GBC6 Lindsey Reames Auditee
6162352600 Laura Anne Pray Auditor
No contacts on file

Notes to SEFA

Title: NOTE B: SECTION 8 NEW CONSTRUCTION AND SUBSTANTIAL REHABILITATION PROGRAM Accounting Policies: NOTE A: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Grand Rapids Housing Commission and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards . Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Moving to Work Demonstration Program and Housing Voucher Cluster, to be an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the expenditures paid by the Commission. De Minimis Rate Used: N Rate Explanation: NOTE C: INDIRECT COST RATE The Commission did not elect to use the 10-percent de minimis indirect cost rate. The accompanying schedule of expenditures of federal awards excludes $1,087,176 of expenditures for the Section 8 New Construction and Substantial Rehabilitation Program of the Commission. The Commission's blended component unit, Ransom Avenue Development Corporation receives a separately issued schedule of expenditures of federal awards and audit performed in accordance with the requirements of Uniform Guidance for the year ended June 30, 2024.
Title: NOTE D: SUB-RECIPIENTS Accounting Policies: NOTE A: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Grand Rapids Housing Commission and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards . Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Moving to Work Demonstration Program and Housing Voucher Cluster, to be an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the expenditures paid by the Commission. De Minimis Rate Used: N Rate Explanation: NOTE C: INDIRECT COST RATE The Commission did not elect to use the 10-percent de minimis indirect cost rate. During the year ended June 30, 2024, the Commission had no sub-recipients.
Title: NOTE E: NONCASH ASSISTANCE AND OTHER Accounting Policies: NOTE A: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Grand Rapids Housing Commission and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards . Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Moving to Work Demonstration Program and Housing Voucher Cluster, to be an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the expenditures paid by the Commission. De Minimis Rate Used: N Rate Explanation: NOTE C: INDIRECT COST RATE The Commission did not elect to use the 10-percent de minimis indirect cost rate. The Commission did not receive any noncash assistance, federal loans, or federally funded insurance during the year ended June 30, 2024. The Commission's blended component unit, Ransom Avenue Development Corporation has received a loan funded by programs of U.S. Department of Housing and Urban Development. The balance of the loan outstanding at June 30, 2024 is $3,815,614.

Finding Details

Finding 2024-001
2024-001 Eligibility Moving to Work Demonstration Program AL No. 14.881 Significant deficiency in internal control Other Matter to be Reported Under the Uniform Guidance Condition: Out of an approximate population of 4,700 of Section 8 Housing Choice Voucher and 220 Low Rent Public Housing tenants the following deficiencies were noted: Section 8 Housing Choice Voucher (a total of 40 tenants selected for testing): • Four files did not have annual recertifications performed during the year available, • Four files did not use the correct utility allowance, • One file did not have support necessary to verify income adjustments, • One file did not use the correct payment standard, • One file did not have support necessary to verify income exemptions, • Six files did not have documentation necessary to verify the reported income, • Seven files did not have a 214 declaration for a member of the household, and • Two files did not have documentation necessary to verify custody of dependent Low Rent Public Housing (a total of 20 tenants selected for testing): • One file did not contain a flat rent options form, • Two files did not have documentation necessary to verify the reported income, • One file did not have a 214 declaration for a member of the household, • One file did not have support necessary to verify income adjustments, • Two files did not have 9886 release of information from within 15 months of the annual recertification, and • Two files did not have an internal control document Criteria: The Commission’s ACOP, Administrative Plan, 24 CFR 960.259, and 24 CFR 982.516 require internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Context: The auditor randomly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Commission is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Commission does not have adequate systems and controls in place to ensure all eligibility requirements are being followed. Effect: The Commission is not in compliance with all of the HUD requirements regarding eligibility and tenant recertification which could result in incorrect amount of rental assistance being provided. Questioned Costs: Unknown. Auditor Recommendations: The Commission should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. The Commission needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Management Response: See Corrective Action Plan.
Finding 2024-001
2024-001 Eligibility Moving to Work Demonstration Program AL No. 14.881 Significant deficiency in internal control Other Matter to be Reported Under the Uniform Guidance Condition: Out of an approximate population of 4,700 of Section 8 Housing Choice Voucher and 220 Low Rent Public Housing tenants the following deficiencies were noted: Section 8 Housing Choice Voucher (a total of 40 tenants selected for testing): • Four files did not have annual recertifications performed during the year available, • Four files did not use the correct utility allowance, • One file did not have support necessary to verify income adjustments, • One file did not use the correct payment standard, • One file did not have support necessary to verify income exemptions, • Six files did not have documentation necessary to verify the reported income, • Seven files did not have a 214 declaration for a member of the household, and • Two files did not have documentation necessary to verify custody of dependent Low Rent Public Housing (a total of 20 tenants selected for testing): • One file did not contain a flat rent options form, • Two files did not have documentation necessary to verify the reported income, • One file did not have a 214 declaration for a member of the household, • One file did not have support necessary to verify income adjustments, • Two files did not have 9886 release of information from within 15 months of the annual recertification, and • Two files did not have an internal control document Criteria: The Commission’s ACOP, Administrative Plan, 24 CFR 960.259, and 24 CFR 982.516 require internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Context: The auditor randomly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Commission is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Commission does not have adequate systems and controls in place to ensure all eligibility requirements are being followed. Effect: The Commission is not in compliance with all of the HUD requirements regarding eligibility and tenant recertification which could result in incorrect amount of rental assistance being provided. Questioned Costs: Unknown. Auditor Recommendations: The Commission should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. The Commission needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Management Response: See Corrective Action Plan.