Audit 350795

FY End

2024-06-30

Total Expended

$3.33M

Findings

2

Programs

3

Organization: Lake Wales Housing Authority (FL)

Year: 2024 Accepted: 2025-03-31

Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
541986	2024-001	Significant Deficiency	-	N
1118428	2024-001	Significant Deficiency	-	N

ALN	Program	Spent	Major	Findings
14.871	Section 8 Housing Choice Vouchers	$2.03M	Yes	1
14.850	Public Housing Operating Fund	$1.17M	-	0
14.872	Public Housing Capital Fund	$5,942	-	0

Contacts

Name	Title	Type
FKUJHB4MFFC3	Albert Kirkland Jr.	Auditee
8636767414	Gaby Miller	Auditor
No contacts on file

Notes to SEFA

Title: HOUSING CHOICE VOUCHER CLUSTER Accounting Policies: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Lake Wales Housing Authority (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 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Schedule presents only a selected portion of the operations of the Authority, and it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority. 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. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Authority received $2,030,788 in federal funding for the Section 8 Housing Choice Voucher Program (ALN 14.871) during the year. The Authority reported $2,139,936 in expenditures on a full accrual basis for the Section 8 Housing Choice Voucher Program during the year, which were paid with federal and nonfederal funds. The Authority reported $38,740 in Port-In expenses during the fiscal year.

Title: PUBLIC AND INDIAN HOUSING Accounting Policies: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Lake Wales Housing Authority (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 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Schedule presents only a selected portion of the operations of the Authority, and it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority. 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. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Authority received $1,294,967 in federal funding for the Public and Indian Housing Program (ALN 14.850) during the fiscal year. The Authority reported $2,007,312 in expenditures on a full accrual basis for the Public and Indian Housing Program during the year. Expenses were paid for by current year HUD funding, tenant rent, and other sources of Public Housing revenue.

Finding Details

Finding 2024-001

2024-001 - Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: FL071 - 2024 Award Period: 07/01/2023-06/30/2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract: (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a five percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Of the tenant files provided, auditor noted one instance where the Authority could not provide a copy of the reasonable rent report to support the determination that the new rent was reasonable when compared to the market for the rent increase and two instances where the rent reasonableness was performed after the effective date and the housing assistance payment was paid before rent reasonableness was performed. Questioned Costs: $1,012 Context: Out of 8 files, 3 files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority does not have adequate procedures in place to ensure that rent reasonableness is performed for rent increases. Repeat Finding: No Recommendation: The Authority should designate an individual to review tenant files to ensure that rent reasonableness is properly performed before the effective date and maintained in the file. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-001

2024-001 - Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: FL071 - 2024 Award Period: 07/01/2023-06/30/2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract: (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a five percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Of the tenant files provided, auditor noted one instance where the Authority could not provide a copy of the reasonable rent report to support the determination that the new rent was reasonable when compared to the market for the rent increase and two instances where the rent reasonableness was performed after the effective date and the housing assistance payment was paid before rent reasonableness was performed. Questioned Costs: $1,012 Context: Out of 8 files, 3 files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority does not have adequate procedures in place to ensure that rent reasonableness is performed for rent increases. Repeat Finding: No Recommendation: The Authority should designate an individual to review tenant files to ensure that rent reasonableness is properly performed before the effective date and maintained in the file. Views of Responsible Officials: There is no disagreement with the audit finding.