Audit 353682

Finding 2024-004: Allowable Activities Housing Choice Voucher – 14.871 Material Weakness/Noncompliance – Activities Allowed or Unallowed Questioned Costs: $7,101.65 Repeat Finding 2023-004 Criteria: In the Housing Choice Voucher program, accumulated administrative fees post fiscal year 2003 may only be used to support the Housing Choice Voucher program. Further, 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. Condition: The Agency shares one checking account for which all bills are paid from and expenses are allocated between the Housing Choice Voucher program and the Management program. The Management program had a decrease in its unrestricted net position of $2,726.03 during the fiscal year ending September 30, 2024 which left a deficit balance of $7,534.93. The Management program owed the Voucher program $7,101.65 and as a result of the deficit unrestricted net position, is unable to repay the funds. Further, the Agency ended providing management services after September 30, 2024 and the program will no longer have a revenue stream and will be unable to repay the funds due to the Voucher program from future revenues. Cause: The Agency was not adequately monitoring its financial condition. Effect or Potential Effect: The Housing Choice Voucher program funded the Management programs losses and related deficit. Recommendation: The Agency should review with HUD on how to handle this issue. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2024-004: Allowable Activities Housing Choice Voucher – 14.871 Material Weakness/Noncompliance – Activities Allowed or Unallowed Questioned Costs: $7,101.65 Repeat Finding 2023-004 Criteria: In the Housing Choice Voucher program, accumulated administrative fees post fiscal year 2003 may only be used to support the Housing Choice Voucher program. Further, 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. Condition: The Agency shares one checking account for which all bills are paid from and expenses are allocated between the Housing Choice Voucher program and the Management program. The Management program had a decrease in its unrestricted net position of $2,726.03 during the fiscal year ending September 30, 2024 which left a deficit balance of $7,534.93. The Management program owed the Voucher program $7,101.65 and as a result of the deficit unrestricted net position, is unable to repay the funds. Further, the Agency ended providing management services after September 30, 2024 and the program will no longer have a revenue stream and will be unable to repay the funds due to the Voucher program from future revenues. Cause: The Agency was not adequately monitoring its financial condition. Effect or Potential Effect: The Housing Choice Voucher program funded the Management programs losses and related deficit. Recommendation: The Agency should review with HUD on how to handle this issue. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.