Audit 359708

FY End
2024-09-30
Total Expended
$912,639
Findings
2
Programs
3
Organization: Fairmont Housing Authority (NC)
Year: 2024 Accepted: 2025-06-24

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
566113 2024-001 - - P
1142555 2024-001 - - P

Programs

Contacts

Name Title Type
V7HYXDKMRHC9 Maria Floyd Auditee
9106287467 Katie O'Neil 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 accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and/or OMB Circular A-122, Cost Principles for Non- Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the Authority under programs of the federal government for the year ended September 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 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 represent the financial position, changes in net assets, or cash flows of the Authority.
Title: Note B – Summary of Significant Accounting Policies: 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 and/or OMB Circular A-122, Cost Principles for Non- Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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. 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 and/or OMB Circular A-122, Cost Principles for Non- Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note C – Indirect Cost Rate: 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 and/or OMB Circular A-122, Cost Principles for Non- Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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. The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note D – Loans Outstanding: 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 and/or OMB Circular A-122, Cost Principles for Non- Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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. As discussed in the Debt note above, the Authority has a note payable to USDA, Rural Development. The loan balance at September 30, 2024, is $ 238,255 .

Finding Details

Statement of Condition – For the Section 8 New Construction Program, we reviewed 5 tenant files (recertification files and new tenant files) for fiscal year ended September 30, 2024. We reviewed 1 file for tenants who moved out during the fiscal year ended September 30, 2024. The selected files represented a sample of all files in the program in current year. We noted 1 instance in which income from wages was incorrectly calculated in determining total tenant income. Criteria – Per the HUD Handbook (Section 5.5), “The owner must use current circumstances to anticipate income…”. Effect – For the file referenced above, wages were annualized assuming the tenant was paid weekly, when the tenant was in fact paid bi-weekly. The net effect of this error was an overstatement of tenant rent of $250 per month. Cause – Incorrect procedures were followed in regards to calculating total tenant income. Recommendation – Procedures surrounding tenant rent calculation processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 56.
Statement of Condition – For the Section 8 New Construction Program, we reviewed 5 tenant files (recertification files and new tenant files) for fiscal year ended September 30, 2024. We reviewed 1 file for tenants who moved out during the fiscal year ended September 30, 2024. The selected files represented a sample of all files in the program in current year. We noted 1 instance in which income from wages was incorrectly calculated in determining total tenant income. Criteria – Per the HUD Handbook (Section 5.5), “The owner must use current circumstances to anticipate income…”. Effect – For the file referenced above, wages were annualized assuming the tenant was paid weekly, when the tenant was in fact paid bi-weekly. The net effect of this error was an overstatement of tenant rent of $250 per month. Cause – Incorrect procedures were followed in regards to calculating total tenant income. Recommendation – Procedures surrounding tenant rent calculation processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 56.