FAC Explorer

Audit 355759

FY End
2024-09-30
Total Expended
$32.36M
Findings
4
Programs
6
Organization: Housing Authority of the County of Merced (CA)
Year: 2024 Accepted: 2025-05-07
Auditor: Smith Marion & CO

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
559789 2024-001 Significant Deficiency Yes N
559790 2024-001 Significant Deficiency Yes N
1136231 2024-001 Significant Deficiency Yes N
1136232 2024-001 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $26.87M Yes 1
14.872 Public Housing Capital Fund $3.53M Yes 0
14.850 Public Housing Operating Fund $1.78M Yes 0
14.879 Mainstream Vouchers $79,622 Yes 1
14.896 Family Self-Sufficiency Program $54,400 - 0
14.238 Shelter Plus Care $43,983 - 0

Contacts

Name Title Type
JMLNFFP2LBM1 Rosa Vazquez Auditee
2097223501 Cole Monroe Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1: SCOPE OF PRESENTATION Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Housing Authority of the County of Merced (the Authority) that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blended or discretely present component units have been included. The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, section 414. The accompanying schedule presents the expenditures incurred (and related awards received) by the Housing Authority of the County of Merced (the Authority) that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blended or discretely present component units have been included.
Title: NOTE 2: BASIS OF ACCOUNTING Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Housing Authority of the County of Merced (the Authority) that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blended or discretely present component units have been included. The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, section 414. The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements.
Title: NOTE 3: 10% DE MINIMIS INDIRECT COST RATE Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Housing Authority of the County of Merced (the Authority) that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blended or discretely present component units have been included. The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, section 414. The Authority has not elected to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, section 414.

Finding Details

Finding 2024-001
The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family‐caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). During our audit, we identified two (2) individuals who did not have support for a the bi-annual inspection. Additionally, we identified Seventeen (17) failed HQS that did not receive a passing inspection within the alloted time frame and no rent abatement process was started or enforced during that time period. During the audit, a sample of 40 tenant files were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 2 of the HCV/Mainstream tenants did not have documentation for a bi-annual inspection. During the audit, a sample of 40 HQS failed inspections were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 17 of the HCV/Mainstream were not properly re-inspected, and no voucher abatement steps were taken to enforce compliance. Controls over compliance associated with HQS inspections are inadequate. The absence of voucher abatement steps and the failure to enforce compliance through potential voucher loss may result in noncompliance with federal program requirements and potential financial implications. We suggest the Authority properly oversee compliance with regulations and enforce rent abatements if necessary to adherence to federal compliance requirements. Management agrees, see Corrective Action Plan.
Finding 2024-001
The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family‐caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). During our audit, we identified two (2) individuals who did not have support for a the bi-annual inspection. Additionally, we identified Seventeen (17) failed HQS that did not receive a passing inspection within the alloted time frame and no rent abatement process was started or enforced during that time period. During the audit, a sample of 40 tenant files were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 2 of the HCV/Mainstream tenants did not have documentation for a bi-annual inspection. During the audit, a sample of 40 HQS failed inspections were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 17 of the HCV/Mainstream were not properly re-inspected, and no voucher abatement steps were taken to enforce compliance. Controls over compliance associated with HQS inspections are inadequate. The absence of voucher abatement steps and the failure to enforce compliance through potential voucher loss may result in noncompliance with federal program requirements and potential financial implications. We suggest the Authority properly oversee compliance with regulations and enforce rent abatements if necessary to adherence to federal compliance requirements. Management agrees, see Corrective Action Plan.
Finding 2024-001
The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family‐caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). During our audit, we identified two (2) individuals who did not have support for a the bi-annual inspection. Additionally, we identified Seventeen (17) failed HQS that did not receive a passing inspection within the alloted time frame and no rent abatement process was started or enforced during that time period. During the audit, a sample of 40 tenant files were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 2 of the HCV/Mainstream tenants did not have documentation for a bi-annual inspection. During the audit, a sample of 40 HQS failed inspections were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 17 of the HCV/Mainstream were not properly re-inspected, and no voucher abatement steps were taken to enforce compliance. Controls over compliance associated with HQS inspections are inadequate. The absence of voucher abatement steps and the failure to enforce compliance through potential voucher loss may result in noncompliance with federal program requirements and potential financial implications. We suggest the Authority properly oversee compliance with regulations and enforce rent abatements if necessary to adherence to federal compliance requirements. Management agrees, see Corrective Action Plan.
Finding 2024-001
The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family‐caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). During our audit, we identified two (2) individuals who did not have support for a the bi-annual inspection. Additionally, we identified Seventeen (17) failed HQS that did not receive a passing inspection within the alloted time frame and no rent abatement process was started or enforced during that time period. During the audit, a sample of 40 tenant files were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 2 of the HCV/Mainstream tenants did not have documentation for a bi-annual inspection. During the audit, a sample of 40 HQS failed inspections were reviewed for the Housing Choice Voucher/Mainstream program. Of these reviewed inspections, 17 of the HCV/Mainstream were not properly re-inspected, and no voucher abatement steps were taken to enforce compliance. Controls over compliance associated with HQS inspections are inadequate. The absence of voucher abatement steps and the failure to enforce compliance through potential voucher loss may result in noncompliance with federal program requirements and potential financial implications. We suggest the Authority properly oversee compliance with regulations and enforce rent abatements if necessary to adherence to federal compliance requirements. Management agrees, see Corrective Action Plan.