FAC Explorer

Audit 356581

FY End
2022-12-31
Total Expended
$1.32M
Findings
6
Programs
3
Organization: Housing Authority of Alto (TX)
Year: 2022 Accepted: 2025-05-19
Auditor: Audit Solutions LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
560826 2022-008 Material Weakness Yes E
560827 2022-009 Material Weakness Yes L
560828 2022-010 Material Weakness Yes L
1137268 2022-008 Material Weakness Yes E
1137269 2022-009 Material Weakness Yes L
1137270 2022-010 Material Weakness Yes L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.03M Yes 3
14.850 Public and Indian Housing $180,479 - 0
14.872 Public Housing Capital Fund $106,865 - 0

Contacts

Name Title Type
SDNRT3P61JV5 Candice Ivory Auditee
9368584921 Shoaib Khar Auditor
No contacts on file

Notes to SEFA

Accounting Policies: NOTE 1 – BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of the Alto Housing Authority, Texas (Authority) under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. NOTE 3 – SOURCES OF FUNDING The schedule includes all grants and contracts entered into directly between the Authority and agencies and departments of the federal government, as well as federal funds passed through to the Authority by primary recipients. The Authority provided no part of its direct grant federal dollars to sub-recipients. NOTE 4 – SUB-RECIPIENTS There were no sub-recipients for the year ended December 31, 2022. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2022-008
Tenant Files – Housing Choice Vouchers Criteria: HUD guidelines on tenant file documentation and maintenance must be followed at all times. Condition: During my review of fifteen tenant files, I noted the following deficiencies:  Two files did not contain proof of citizenship (Form 214) and the lease agreement signed.  No annual independent income verification was present in three tenant files.  Three files did not contain authorization for the release of information form.  None of the files contained determination of rent reasonableness form.  One file did not have an inspection form or failed to perform an inspection. Questioned Costs: None noted. Effect: Tenant files are incomplete and could have incorrect rent calculation. Cause: Unknown, as the current administration is not aware of the prior administrations process of managing the tenant files. Recommendation: I recommend that the Authority ensure that all tenant files are maintained properly, and supervisory reviews are performed to ensure completeness and accuracy. Management’s Response: The audit revealed missing critical documentation in Housing Choice Vouchers tenant files. Staff will be retrained on HUD’s file management requirements, and a standardized audit and review process has been introduced for both new tenant intakes and annual recertifications. Corrective efforts are underway to update and complete all current files.
Finding 2022-009
SEMAP Supporting Documentation Criteria: SEMAP indicators should be supported by sufficient documentation. Condition: I noted that all indicators on FY 2022, SEMAP certification could not be verified as they were either not supported by adequate documentation or no quality control work were performed to substantiate PHA’s response. Questioned Costs: None noted. Effect: Responses on SEMAP certification may not be an accurate representation of PHA’s FY 2022 submission. Cause: Proper internal control procedures relating to SEMAP were not performed or maintained for SEMAP certification. Recommendation: I recommend that the Authority implement and perfect the procedures necessary to provide accurate and complete supporting documentation for future SEMAP certification. Management’s Response: The auditor noted that the Authority did not maintain supporting documentation for the Section Eight Management Assessment Program (SEMAP). Management has revised the SEMAP documentation process, implemented a submission checklist, and created a backup retention system to ensure compliance with HUD requirements.
Finding 2022-010
Late Submission Criteria: The Authority must submit the audited financial statement to REAC and the Federal Clearinghouse within 9 months of the fiscal year. Condition: I noted that the Authority did not submit the electronic transmission of their GAAP based audited Financial Data Schedule (FDS) to the Financial Assessment Subsystem of REAC and the Federal Clearinghouse within the 9 months of their year-end. Questioned Costs: None noted. Effect: As a result, the Authority did not comply with the HUD requirement of submitting the audit within the allotted time. Cause: The Authority was not required to have an audit performed in previous years due to the level of federal funding received. Effective FY 2022, the federal funding changed significantly due to the Authority absorbing Rusk Housing Authority Housing Choice Vouchers. However, it appears that the previous administration was not aware of this requirement to have an audit performed. Recommendation: I recommend that the Authority implement controls to ensure the audit is performed and submitted in a timely manner. Management’s Response: The financial statements were submitted to HUD after the required deadline. To prevent future delays, management has implemented a compliance calendar to track all reporting deadlines. Reports are now scheduled for internal review at least two weeks prior to submission to ensure timeliness.
Finding 2022-008
Tenant Files – Housing Choice Vouchers Criteria: HUD guidelines on tenant file documentation and maintenance must be followed at all times. Condition: During my review of fifteen tenant files, I noted the following deficiencies:  Two files did not contain proof of citizenship (Form 214) and the lease agreement signed.  No annual independent income verification was present in three tenant files.  Three files did not contain authorization for the release of information form.  None of the files contained determination of rent reasonableness form.  One file did not have an inspection form or failed to perform an inspection. Questioned Costs: None noted. Effect: Tenant files are incomplete and could have incorrect rent calculation. Cause: Unknown, as the current administration is not aware of the prior administrations process of managing the tenant files. Recommendation: I recommend that the Authority ensure that all tenant files are maintained properly, and supervisory reviews are performed to ensure completeness and accuracy. Management’s Response: The audit revealed missing critical documentation in Housing Choice Vouchers tenant files. Staff will be retrained on HUD’s file management requirements, and a standardized audit and review process has been introduced for both new tenant intakes and annual recertifications. Corrective efforts are underway to update and complete all current files.
Finding 2022-009
SEMAP Supporting Documentation Criteria: SEMAP indicators should be supported by sufficient documentation. Condition: I noted that all indicators on FY 2022, SEMAP certification could not be verified as they were either not supported by adequate documentation or no quality control work were performed to substantiate PHA’s response. Questioned Costs: None noted. Effect: Responses on SEMAP certification may not be an accurate representation of PHA’s FY 2022 submission. Cause: Proper internal control procedures relating to SEMAP were not performed or maintained for SEMAP certification. Recommendation: I recommend that the Authority implement and perfect the procedures necessary to provide accurate and complete supporting documentation for future SEMAP certification. Management’s Response: The auditor noted that the Authority did not maintain supporting documentation for the Section Eight Management Assessment Program (SEMAP). Management has revised the SEMAP documentation process, implemented a submission checklist, and created a backup retention system to ensure compliance with HUD requirements.
Finding 2022-010
Late Submission Criteria: The Authority must submit the audited financial statement to REAC and the Federal Clearinghouse within 9 months of the fiscal year. Condition: I noted that the Authority did not submit the electronic transmission of their GAAP based audited Financial Data Schedule (FDS) to the Financial Assessment Subsystem of REAC and the Federal Clearinghouse within the 9 months of their year-end. Questioned Costs: None noted. Effect: As a result, the Authority did not comply with the HUD requirement of submitting the audit within the allotted time. Cause: The Authority was not required to have an audit performed in previous years due to the level of federal funding received. Effective FY 2022, the federal funding changed significantly due to the Authority absorbing Rusk Housing Authority Housing Choice Vouchers. However, it appears that the previous administration was not aware of this requirement to have an audit performed. Recommendation: I recommend that the Authority implement controls to ensure the audit is performed and submitted in a timely manner. Management’s Response: The financial statements were submitted to HUD after the required deadline. To prevent future delays, management has implemented a compliance calendar to track all reporting deadlines. Reports are now scheduled for internal review at least two weeks prior to submission to ensure timeliness.