Audit 36059

Federal Program: Indian Housing Block Grant (including CARES) AL #14.867 Criteria: The Program requires the Corporation to develop written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant funds. Condition: During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-five files: 1) four files were missing their annual recertification documentation or was not signed by tenant or authority; 2) five files did not have a current recertification or income verified annually; 3) two files were missing proof of tribal enrollment; 4) three files did not have an individual checklist available to verify whether applicable documents were received for the most recent application period. Questioned Costs: Undeterminable Context: We tested 25 files out of a total of tenant population of 272. Effect: Non-compliance with eligibility requirements within the Corporation?s policies and NAHASDA regulations. Cause: Lack of controls and oversight during the year. Repeat Finding: This is a repeat finding of 2021-004. Recommendation: We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials: A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

Criteria or Specific Requirement: Sound business practices require that all receivables are collected in a prompt and efficient manner to assure adequate operating funds are available to maintain the housing units in proper order. Condition: The Spirit Lake Housing Corporation does not have adequate policies in place to enforce rent collections. This resulted in excessive tenant accounts receivable at March 31, 2022. Questioned Costs: N/A Effect: The Spirit Lake Housing Corporation forfeits operating funds in material amounts that minimizes available monies for routine maintenance and repair and other common operating costs. The allowance for doubtful accounts as of March 31, 2022 was $1,734,879. Cause: The Spirit Lake Housing Corporation does not enforce its policies on delinquent tenants to ensure payment of rents earned. Recommendation: The Spirit Lake Housing Corporation needs to prioritize the enforcement of rent collection policies and establish payment plans for delinquent tenants. In many cases, payment plans can be established through payroll deduction with the tenants? employers. Management Response and Corrective Action: The Spirit Lake Housing Corporation agrees with this finding and is working to improve upon and enforce the rent collection policies.

Federal Program: Indian Housing Block Grant (including CARES) AL #14.867 Criteria: The Program requires the Corporation to develop written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant funds. Condition: During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-five files: 1) four files were missing their annual recertification documentation or was not signed by tenant or authority; 2) five files did not have a current recertification or income verified annually; 3) two files were missing proof of tribal enrollment; 4) three files did not have an individual checklist available to verify whether applicable documents were received for the most recent application period. Questioned Costs: Undeterminable Context: We tested 25 files out of a total of tenant population of 272. Effect: Non-compliance with eligibility requirements within the Corporation?s policies and NAHASDA regulations. Cause: Lack of controls and oversight during the year. Repeat Finding: This is a repeat finding of 2021-004. Recommendation: We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials: A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

Criteria or Specific Requirement: Sound business practices require that all receivables are collected in a prompt and efficient manner to assure adequate operating funds are available to maintain the housing units in proper order. Condition: The Spirit Lake Housing Corporation does not have adequate policies in place to enforce rent collections. This resulted in excessive tenant accounts receivable at March 31, 2022. Questioned Costs: N/A Effect: The Spirit Lake Housing Corporation forfeits operating funds in material amounts that minimizes available monies for routine maintenance and repair and other common operating costs. The allowance for doubtful accounts as of March 31, 2022 was $1,734,879. Cause: The Spirit Lake Housing Corporation does not enforce its policies on delinquent tenants to ensure payment of rents earned. Recommendation: The Spirit Lake Housing Corporation needs to prioritize the enforcement of rent collection policies and establish payment plans for delinquent tenants. In many cases, payment plans can be established through payroll deduction with the tenants? employers. Management Response and Corrective Action: The Spirit Lake Housing Corporation agrees with this finding and is working to improve upon and enforce the rent collection policies.