Finding 2024-002: Emergency Housing Vouchers
Material Weakness/Noncompliance
Criteria: Notice PIH 2023-014 details the statutory restriction prohibiting the reissuance of turnover EHVs after September 30, 2023, as discussed in Section 13 of the Notice PIH 2021-15. Turnover EHVs stand for vouchers made available by families ending their participation with the EHV Program.
Condition: The Authority leased 4 new Emergency Housing Vouchers after the September 30, 2023 which was restricted by Notice PIH 2023-014. The Authority incurred $21,547 of HAP expense and $4,000 of service fee expenses related to this. The Authority had earned $3,058.45 of administrative fees and $4,000 of service fees related to these transactions.
Cause: The restriction was brought to the attention of the Executive Director but the Executive Director instructed staff to lease the units anyway.
Effect or Potential Effect: The Authority was in noncompliance with the restriction to not issue new EHV Vouchers after September 30, 2024. Adjustments were made during the audit process to account for this. The $21,547 of HAP expense and $4,000 of service fee expense were moved to the Authority’s nonfederal Business program. As a result, the HAP expense in the EHV program were reduced and those funds flowed into EHV’s net restricted position. The administrative funds and service fees earned were reduced and the related funds were added to unearned revenue.
Recommendation: The Authority should review Notice PIH 2023-014 and not issue any new EHV Vouchers.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.
Finding 2024-003: Voucher Management System, Financial Data Schedule
Material Weakness/Noncompliance
Criteria: The PHA submits HUD-52681-B, Voucher for Payment of Annual Contributions and Operating Statement monthly to HUD electronically via the VMS. This information is used for funding and monitoring decisions.
The Authority is also required to submit its year-end financial information, financial data schedules (FDS), utilizing HUD’s Financial Assessment System. HUD utilizes this data for monitoring and oversight.
Condition: During our audit, we attempted to reconcile the Unrestricted Net Position (UNP) reported in the VMS system for both the Housing Choice Voucher program and the Emergency Housing Voucher program. The Emergency Housing Voucher program was reported in VMS incorrectly and did not reconcile to either the FDS or the Authority general ledger. The variance was $5,901. We noted for the Housing Choice Voucher program that the UNP did reconcile to the FDS but not the general ledger. In further reviewing the data, the FDS and general ledger did not agree and had a $36,152 variance.
We further noted the cash and investment reported for Emergency Housing Voucher program did not reconcile and the VMS figure had a variance of $20,640.
Cause: The error in the Housing Choice Voucher program appeared to be due to a journal entry posted after the FDS was submitted and the VMS was adjusted to match the FDS. We were unable to determine what the error occurred in the Emergency Housing Voucher program.
Effect or Potential Effect: The items listed above reported in VMS and the FDS systems did not reconcile to the Authority’s supporting data. Adjustments were made for the submission of the audited FDS and VMS was adjusted to match.
Recommendation: The Authority should review the errors with its fee accountant to ensure future reports reconcile to the underlying data.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.
Finding 2024-002: Emergency Housing Vouchers
Material Weakness/Noncompliance
Criteria: Notice PIH 2023-014 details the statutory restriction prohibiting the reissuance of turnover EHVs after September 30, 2023, as discussed in Section 13 of the Notice PIH 2021-15. Turnover EHVs stand for vouchers made available by families ending their participation with the EHV Program.
Condition: The Authority leased 4 new Emergency Housing Vouchers after the September 30, 2023 which was restricted by Notice PIH 2023-014. The Authority incurred $21,547 of HAP expense and $4,000 of service fee expenses related to this. The Authority had earned $3,058.45 of administrative fees and $4,000 of service fees related to these transactions.
Cause: The restriction was brought to the attention of the Executive Director but the Executive Director instructed staff to lease the units anyway.
Effect or Potential Effect: The Authority was in noncompliance with the restriction to not issue new EHV Vouchers after September 30, 2024. Adjustments were made during the audit process to account for this. The $21,547 of HAP expense and $4,000 of service fee expense were moved to the Authority’s nonfederal Business program. As a result, the HAP expense in the EHV program were reduced and those funds flowed into EHV’s net restricted position. The administrative funds and service fees earned were reduced and the related funds were added to unearned revenue.
Recommendation: The Authority should review Notice PIH 2023-014 and not issue any new EHV Vouchers.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.
Finding 2024-003: Voucher Management System, Financial Data Schedule
Material Weakness/Noncompliance
Criteria: The PHA submits HUD-52681-B, Voucher for Payment of Annual Contributions and Operating Statement monthly to HUD electronically via the VMS. This information is used for funding and monitoring decisions.
The Authority is also required to submit its year-end financial information, financial data schedules (FDS), utilizing HUD’s Financial Assessment System. HUD utilizes this data for monitoring and oversight.
Condition: During our audit, we attempted to reconcile the Unrestricted Net Position (UNP) reported in the VMS system for both the Housing Choice Voucher program and the Emergency Housing Voucher program. The Emergency Housing Voucher program was reported in VMS incorrectly and did not reconcile to either the FDS or the Authority general ledger. The variance was $5,901. We noted for the Housing Choice Voucher program that the UNP did reconcile to the FDS but not the general ledger. In further reviewing the data, the FDS and general ledger did not agree and had a $36,152 variance.
We further noted the cash and investment reported for Emergency Housing Voucher program did not reconcile and the VMS figure had a variance of $20,640.
Cause: The error in the Housing Choice Voucher program appeared to be due to a journal entry posted after the FDS was submitted and the VMS was adjusted to match the FDS. We were unable to determine what the error occurred in the Emergency Housing Voucher program.
Effect or Potential Effect: The items listed above reported in VMS and the FDS systems did not reconcile to the Authority’s supporting data. Adjustments were made for the submission of the audited FDS and VMS was adjusted to match.
Recommendation: The Authority should review the errors with its fee accountant to ensure future reports reconcile to the underlying data.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.