FAC Explorer

Audit 351312

FY End
2023-06-30
Total Expended
$22.54M
Findings
12
Programs
15
Organization: Municipality of Juana Diaz (PR)
Year: 2023 Accepted: 2025-03-31
Auditor: Pedro C Ortiz Ledee CPA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
546942 2023-005 Material Weakness Yes J
546943 2023-006 Material Weakness Yes E
546944 2023-007 Material Weakness Yes L
546945 2023-008 Material Weakness Yes N
546946 2023-007 Material Weakness Yes L
546947 2023-008 Material Weakness Yes N
1123384 2023-005 Material Weakness Yes J
1123385 2023-006 Material Weakness Yes E
1123386 2023-007 Material Weakness Yes L
1123387 2023-008 Material Weakness Yes N
1123388 2023-007 Material Weakness Yes L
1123389 2023-008 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
97.030 Community Disaster Loans $2.22M - 0
93.356 Head Start Disaster Recovery $1.96M - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.56M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $498,716 Yes 0
93.575 Child Care and Development Block Grant $373,904 - 0
21.019 Coronavirus Relief Fund $333,808 - 0
10.558 Child and Adult Care Food Program $130,998 - 0
93.600 Head Start $81,617 - 0
14.218 Community Development Block Grants/entitlement Grants $77,489 Yes 0
32.009 Emergency Connectivity Fund Program $75,840 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $60,798 - 0
14.241 Housing Opportunities for Persons with Aids $34,420 - 0
14.896 Family Self-Sufficiency Program $25,535 - 0
14.871 Section 8 Housing Choice Vouchers $12,849 Yes 2
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $8,649 - 0

Contacts

Name Title Type
QW6NNELX38Y7 Maria Boglio Auditee
7878372275 Pedro C Ortiz Ledee Auditor
No contacts on file

Notes to SEFA

Title: NOTE A – BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (“the schedule”) includes the federal grant activity of the Municipality under programs of the federal government for the fiscal year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulation (CFR Part 200), Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, some amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position and changes in net position of the Municipality.
Title: NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
Title: NOTE C – ASSISTANCE LISTING NUMBER Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Assistance Listing Number, formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all Federal assistance award mechanisms, including Federal grants and cooperative agreements. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
Title: NOTE D – INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Title: NOTE E – MAJOR PROGRAMS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
Title: NOTE F – SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. During fiscal year 2022-2023, there were no awards passed through to sub-recipients.
Title: NOTE G – RECONCILIATION OF EXPENDITURES PRESENTED IN THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO THE EXPENDITURES PRESENTED IN THE BASIC FINANCIAL STATEMENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The reconciliation between the expenditures in the fund financial statements and the expenditures in the Schedule of Expenditures of Federal Awards is as follows:
Title: NOTE H – COMMUNITY DISASTER LOANS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures are reported on a statutory basis as required by the U.S. Department of accounting_policiesHousing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. On September 30, 2021, the United States Congress passed the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43). According to P.L. 117-43 SEC. 1601. (a): “Repayments of the remaining balances of all loans, as of September 30, 2021, by the Federal Emergency Management Agency under section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5184) are hereby cancelled”. Accordingly, the Municipality outstanding balances of principal and interest of the referenced Community Disaster Loans, as of September 30, 2021, were cancelled. Loan expenditures during the fiscal year 2022-2023 amounted to $2,223,806.

Finding Details

Finding 2023-005
FINDING 2023-005 FEDERAL PROGRAMS COMMUNITY DEVELOPMENT BLOCK GRANTS/ ENTITLEMENT GRANTS CLUSTER: COMMUNITY DEVELOPMENT BLOCK GRANTS/ ENTITLEMENT GRANTS (ASSISTANCE LISTING NUMBER 14.218) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT PROGRAM INCOME CONDITION During the Program Income test, I noted that the Municipality did not spend down program income funds on hand before grant funds. The Program had $224,800 in program income funds available to be disbursed for eligible activities during fiscal year 2022-2023. Nevertheless, the program only spends $92,126 of these funds and made cash withdrawals of CDBG funds for activities that could be covered with program income funds. CRITERIA Code of Federal Regulations 24, Section 570.504(b)(2)(ii) states that if the recipient chooses to retain program income, that program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U. S. Treasury. CAUSE During the fiscal year 2022-2023, the Program did not maintain appropriate internal controls to ensure that all program income funds are used before additional grant funds drawdowns are made. EFFECT When Grant Funds are used for an expenditure in place of the Program Income on hand, the grantee will not have the opportunity to increase the amounts available for program activities. RECOMMENDATION I recommend management continue improving the internal controls and procedures to ensure that the program income funds are used for CDBG activities before withdrawal of CDBG funds. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-005) VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure that the program income funds will be used for CDBG activities before the withdrawal of CDBG funds.
Finding 2023-006
FINDING NUMBER 2023-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS (ASSISTANCE LISTING NUMBER 14.871) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, twenty (25) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In seven (7) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. b. In three (3) participants’ files, the housing assistance payment was incorrect due to errors in the determination of the family income (2 files) or applicable deductions (1 file) used in the calculation. c. Four (4) participants’ files did not include the certificate of criminal record and one (1) participant file did not include the certification of the verification in the sex offenders register for one or more adult family members. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) (1) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided.   CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to people that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the re-examination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-006) VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure that the re-examination and HAP determination processes will be performed according to program requirements and guidelines, and to obtain in a timely manner all the required documentation for each reexamination executed.
Finding 2023-007
FINDING NUMBER 2023-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not comply with the financial and special reporting requirements, as follows: 1. The GAAP-based audited financial information of the programs for the fiscal year ended June 30, 2023, was not submitted on time through the FASS-PH system. 2. The expenditures reported in the Voucher Management System (VMS) for the fiscal year ended June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: HOUSING CHOICE VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 87,751 $ 114,508 $ (26,757) Housing Assistance Payments 527,986 540,385 (12,399) HAP Portability-in 224,441 226,604 (2,163) Total $ 840,178 $ 881,497 $ (41,319) EMERGENCY HOUSING VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 6,435 $ 8,183 $ (1,748) Total Operating -Tenants 500 500 - Emergency Housing Vouchers 41,191 46,407 (5,216) Total $ 48,126 $ 55,090 $ (6,964) CRITERIA 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. Also, 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Municipality failed to ensure the accuracy of the expenditures reported in the VMS and the timely submission to HUD of the GAAP based audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the reports to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-007).   VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements, and to reconcile the amounts reported in the Voucher Management System (VMS) with the accounting records and proceed with any necessary corrections about the information previously reported. Moreover, the audited financial data schedule for the fiscal year 2022-2023 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2023-008
FINDING NUMBER 2023-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: VMS FASS-PH DIFFERENCE HCV - Restricted Net Position Funds (RNP) $ 34,760 $ 52,596 $ (17,836) HCV -Unrestricted Net Position Funds (UNP) $ 66,142 $ 42,043 $ 24,099 Emergency Housing Vouchers - Restricted Net Position Funds (RNP) $ 575 $ 19,471 $ (18,896) Emergency Housing Vouchers - Unrestricted Net Position Funds (UNP) $ (3,391) $ 6,693 $ (10,084) CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD. RECOMMENDATION I recommend management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2022-009). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the Voucher Management System (VMS). Also, the Program staff were instructed to analyze previous equity balances reported in the VMS and realize any necessary corrections.
Finding 2023-007
FINDING NUMBER 2023-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not comply with the financial and special reporting requirements, as follows: 1. The GAAP-based audited financial information of the programs for the fiscal year ended June 30, 2023, was not submitted on time through the FASS-PH system. 2. The expenditures reported in the Voucher Management System (VMS) for the fiscal year ended June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: HOUSING CHOICE VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 87,751 $ 114,508 $ (26,757) Housing Assistance Payments 527,986 540,385 (12,399) HAP Portability-in 224,441 226,604 (2,163) Total $ 840,178 $ 881,497 $ (41,319) EMERGENCY HOUSING VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 6,435 $ 8,183 $ (1,748) Total Operating -Tenants 500 500 - Emergency Housing Vouchers 41,191 46,407 (5,216) Total $ 48,126 $ 55,090 $ (6,964) CRITERIA 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. Also, 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Municipality failed to ensure the accuracy of the expenditures reported in the VMS and the timely submission to HUD of the GAAP based audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the reports to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-007).   VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements, and to reconcile the amounts reported in the Voucher Management System (VMS) with the accounting records and proceed with any necessary corrections about the information previously reported. Moreover, the audited financial data schedule for the fiscal year 2022-2023 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2023-008
FINDING NUMBER 2023-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: VMS FASS-PH DIFFERENCE HCV - Restricted Net Position Funds (RNP) $ 34,760 $ 52,596 $ (17,836) HCV -Unrestricted Net Position Funds (UNP) $ 66,142 $ 42,043 $ 24,099 Emergency Housing Vouchers - Restricted Net Position Funds (RNP) $ 575 $ 19,471 $ (18,896) Emergency Housing Vouchers - Unrestricted Net Position Funds (UNP) $ (3,391) $ 6,693 $ (10,084) CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD. RECOMMENDATION I recommend management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2022-009). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the Voucher Management System (VMS). Also, the Program staff were instructed to analyze previous equity balances reported in the VMS and realize any necessary corrections.
Finding 2023-005
FINDING 2023-005 FEDERAL PROGRAMS COMMUNITY DEVELOPMENT BLOCK GRANTS/ ENTITLEMENT GRANTS CLUSTER: COMMUNITY DEVELOPMENT BLOCK GRANTS/ ENTITLEMENT GRANTS (ASSISTANCE LISTING NUMBER 14.218) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT PROGRAM INCOME CONDITION During the Program Income test, I noted that the Municipality did not spend down program income funds on hand before grant funds. The Program had $224,800 in program income funds available to be disbursed for eligible activities during fiscal year 2022-2023. Nevertheless, the program only spends $92,126 of these funds and made cash withdrawals of CDBG funds for activities that could be covered with program income funds. CRITERIA Code of Federal Regulations 24, Section 570.504(b)(2)(ii) states that if the recipient chooses to retain program income, that program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U. S. Treasury. CAUSE During the fiscal year 2022-2023, the Program did not maintain appropriate internal controls to ensure that all program income funds are used before additional grant funds drawdowns are made. EFFECT When Grant Funds are used for an expenditure in place of the Program Income on hand, the grantee will not have the opportunity to increase the amounts available for program activities. RECOMMENDATION I recommend management continue improving the internal controls and procedures to ensure that the program income funds are used for CDBG activities before withdrawal of CDBG funds. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-005) VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to ensure that the program income funds will be used for CDBG activities before the withdrawal of CDBG funds.
Finding 2023-006
FINDING NUMBER 2023-006 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS (ASSISTANCE LISTING NUMBER 14.871) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT ELIGIBILITY CONDITION During the Eligibility test, twenty (25) participants’ files were examined related to the reexamination process, and noted the following conditions: a. In seven (7) participants’ files, the Enterprise Income Verification (EIV) report corresponding to the annual reexamination selected for evaluation, was not available for my review. b. In three (3) participants’ files, the housing assistance payment was incorrect due to errors in the determination of the family income (2 files) or applicable deductions (1 file) used in the calculation. c. Four (4) participants’ files did not include the certificate of criminal record and one (1) participant file did not include the certification of the verification in the sex offenders register for one or more adult family members. CRITERIA Code of Federal Regulation 24, Section 982.516 (a) (1) states that the PHA must conduct a reexamination of family income and composition at least annually; (2) the PHA must obtain and document in the tenant file third party verification of the following factors or must document in the file why third party verification was not available: (A) reported family annual income; (B) the value of assets; (C) expenses related to deductions from annual income; and (D) other factors that affects the determination of adjusted income. In accordance with the regulations at 24 CFR 5.856 and 5.905, O/As and PHAs must perform necessary criminal history background checks to determine if an applicant, or a member of an applicant’s household, is subject to a lifetime registration requirement under a state sex offender registration program. This check must be carried out with respects to the State in which the housing is located and with respect to States where the applicant and members of the applicant’s household are known to have resided.   CAUSE The Program’s internal controls and procedures failed to ensure that the reexamination and HAP determination processes were performed according to program requirements and guidelines. Also, the internal controls did not ensure that all the required documentation necessary for the reexamination process was obtained from the participants. EFFECT The lack of monitoring and adequate supporting documentation during the reexamination processes could lead to the approval and disbursement of improper amounts and the approval of benefits to people that do not qualify. RECOMMENDATION I recommend management to continue strengthening its internal controls and procedures to ensure that the re-examination and HAP determination processes are performed according to program requirements and guidelines. Also, management must reinforce the internal controls to ensure that all the required documentation necessary for the reexamination process is obtained in a timely manner. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-006) VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure that the re-examination and HAP determination processes will be performed according to program requirements and guidelines, and to obtain in a timely manner all the required documentation for each reexamination executed.
Finding 2023-007
FINDING NUMBER 2023-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not comply with the financial and special reporting requirements, as follows: 1. The GAAP-based audited financial information of the programs for the fiscal year ended June 30, 2023, was not submitted on time through the FASS-PH system. 2. The expenditures reported in the Voucher Management System (VMS) for the fiscal year ended June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: HOUSING CHOICE VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 87,751 $ 114,508 $ (26,757) Housing Assistance Payments 527,986 540,385 (12,399) HAP Portability-in 224,441 226,604 (2,163) Total $ 840,178 $ 881,497 $ (41,319) EMERGENCY HOUSING VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 6,435 $ 8,183 $ (1,748) Total Operating -Tenants 500 500 - Emergency Housing Vouchers 41,191 46,407 (5,216) Total $ 48,126 $ 55,090 $ (6,964) CRITERIA 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. Also, 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Municipality failed to ensure the accuracy of the expenditures reported in the VMS and the timely submission to HUD of the GAAP based audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the reports to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-007).   VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements, and to reconcile the amounts reported in the Voucher Management System (VMS) with the accounting records and proceed with any necessary corrections about the information previously reported. Moreover, the audited financial data schedule for the fiscal year 2022-2023 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2023-008
FINDING NUMBER 2023-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: VMS FASS-PH DIFFERENCE HCV - Restricted Net Position Funds (RNP) $ 34,760 $ 52,596 $ (17,836) HCV -Unrestricted Net Position Funds (UNP) $ 66,142 $ 42,043 $ 24,099 Emergency Housing Vouchers - Restricted Net Position Funds (RNP) $ 575 $ 19,471 $ (18,896) Emergency Housing Vouchers - Unrestricted Net Position Funds (UNP) $ (3,391) $ 6,693 $ (10,084) CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD. RECOMMENDATION I recommend management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2022-009). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the Voucher Management System (VMS). Also, the Program staff were instructed to analyze previous equity balances reported in the VMS and realize any necessary corrections.
Finding 2023-007
FINDING NUMBER 2023-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not comply with the financial and special reporting requirements, as follows: 1. The GAAP-based audited financial information of the programs for the fiscal year ended June 30, 2023, was not submitted on time through the FASS-PH system. 2. The expenditures reported in the Voucher Management System (VMS) for the fiscal year ended June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: HOUSING CHOICE VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 87,751 $ 114,508 $ (26,757) Housing Assistance Payments 527,986 540,385 (12,399) HAP Portability-in 224,441 226,604 (2,163) Total $ 840,178 $ 881,497 $ (41,319) EMERGENCY HOUSING VOUCHERS VMS FASS-PH DIFFERENCE Operating and Administrative $ 6,435 $ 8,183 $ (1,748) Total Operating -Tenants 500 500 - Emergency Housing Vouchers 41,191 46,407 (5,216) Total $ 48,126 $ 55,090 $ (6,964) CRITERIA 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. Also, 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Municipality failed to ensure the accuracy of the expenditures reported in the VMS and the timely submission to HUD of the GAAP based audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the reports to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-007).   VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements, and to reconcile the amounts reported in the Voucher Management System (VMS) with the accounting records and proceed with any necessary corrections about the information previously reported. Moreover, the audited financial data schedule for the fiscal year 2022-2023 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.
Finding 2023-008
FINDING NUMBER 2023-008 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE COMPLIANCE REQUIREMENT SPECIAL TEST- ROLLING FORWARD EQUITY BALANCES CONDITION During the examination of the program accounting records, I noted that the equity balances reported in the Voucher Management System (VMS) for the month of June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows: VMS FASS-PH DIFFERENCE HCV - Restricted Net Position Funds (RNP) $ 34,760 $ 52,596 $ (17,836) HCV -Unrestricted Net Position Funds (UNP) $ 66,142 $ 42,043 $ 24,099 Emergency Housing Vouchers - Restricted Net Position Funds (RNP) $ 575 $ 19,471 $ (18,896) Emergency Housing Vouchers - Unrestricted Net Position Funds (UNP) $ (3,391) $ 6,693 $ (10,084) CRITERIA Code of Federal Regulations, 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD. CAUSE The Program’s internal controls and procedures over the accounting records failed to assure that the equity balances were properly calculated and reported in the VMS. EFFECT The Program is not reporting the correct balances of restricted net position and unrestricted net position to HUD. RECOMMENDATION I recommend management to prepare an analysis of the equity balances and adjust or correct any errors reported in the VMS. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2022-009). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the equity balances were properly calculated and reported in the Voucher Management System (VMS). Also, the Program staff were instructed to analyze previous equity balances reported in the VMS and realize any necessary corrections.