FAC Explorer

Audit 362709

FY End
2024-12-31
Total Expended
$834,516
Findings
6
Programs
3
Organization: Otter Tail Housing and Redevelopment Authority (MN)
Year: 2024 Accepted: 2025-07-22
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
571713 2024-001 Significant Deficiency - E
571714 2024-002 Significant Deficiency - N
571715 2024-003 Significant Deficiency - N
1148155 2024-001 Significant Deficiency - E
1148156 2024-002 Significant Deficiency - N
1148157 2024-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $748,363 Yes 3
14.850 Public Housing Operating Fund $45,308 - 0
14.872 Public Housing Capital Fund $40,845 - 0

Contacts

Name Title Type
M99ZKM1B5GH3 Amy Baldwin Auditee
2189988730 Brian Opsahl Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the accompanying schedule of expenditures of federal awards (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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Otter Tail County Housing and Redevelopment Authority has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Schedule includes the federal award activity of the Otter Tail County Housing and Redevelopment Authority under programs of the federal government for the year ended December 31, 2024. 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 for Federal Awards. 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.

Finding Details

Finding 2024-001
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency. Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). The PHA must also determine income eligibility and calculate the tenant’s rent payment using the documentation from thirdparty verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Condition During our review of tenant files, one file did not maintain proof of citizenship or eligible immigrant status. The same tenant file was also missing documentation of a social security number. We also noted during our review of tenant files, one file did not correctly calculate the tenant’s rent payment. Questioned Costs None. Context We reviewed a sample of 11 of the Authority’s 108 tenant files for eligibility requirements. Effect Tenants may receive HAP funding without meeting eligibility requirements and HAP payments may be paid in the incorrect amounts. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review their procedures of determining eligibility to ensure all requirements are obtained and maintained and that a review of the files is taking place to ensure proper HAP payments. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement auditor’s recommendation.
Finding 2024-002
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS) and the HA must conduct quality control reinspections. Condition During our review of quality control re-inspections, it was noted 7 quality control re-inspections were required, but only 4 were performed. Questioned Costs None. Context We reviewed a sample of 2 of the Authority’s 7 quality control re-inspections for HQS Inspection requirements. Effect A lack of quality control review over inspections could lead to inspections being performed incorrectly and a tenant living in a unit that does not meet Housing Quality Standards. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review the compliance requirements to gain an understanding on how to determine the required number of re-inspections. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Finding 2024-003
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria 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 inspection 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. Condition During our testing of failed inspections, we noted one instance in which a life threatening deficiency was not corrected within 24 hours and HAP was not abated. Questioned Costs None. Context We reviewed a sample of 3 of the Authority’s 30 failed inspections for HQS Enforcement requirements. Effect Tenant may be living in units that do not meet HQS. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review their procedures in following up on life threatening deficiencies to ensure they are corrected in the appropriate time frame. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendation.
Finding 2024-001
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency. Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). The PHA must also determine income eligibility and calculate the tenant’s rent payment using the documentation from thirdparty verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Condition During our review of tenant files, one file did not maintain proof of citizenship or eligible immigrant status. The same tenant file was also missing documentation of a social security number. We also noted during our review of tenant files, one file did not correctly calculate the tenant’s rent payment. Questioned Costs None. Context We reviewed a sample of 11 of the Authority’s 108 tenant files for eligibility requirements. Effect Tenants may receive HAP funding without meeting eligibility requirements and HAP payments may be paid in the incorrect amounts. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review their procedures of determining eligibility to ensure all requirements are obtained and maintained and that a review of the files is taking place to ensure proper HAP payments. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement auditor’s recommendation.
Finding 2024-002
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS) and the HA must conduct quality control reinspections. Condition During our review of quality control re-inspections, it was noted 7 quality control re-inspections were required, but only 4 were performed. Questioned Costs None. Context We reviewed a sample of 2 of the Authority’s 7 quality control re-inspections for HQS Inspection requirements. Effect A lack of quality control review over inspections could lead to inspections being performed incorrectly and a tenant living in a unit that does not meet Housing Quality Standards. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review the compliance requirements to gain an understanding on how to determine the required number of re-inspections. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Finding 2024-003
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Grant Award No. MN177-Housing Choice Voucher Federal Award Year 2024 Criteria 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 inspection 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. Condition During our testing of failed inspections, we noted one instance in which a life threatening deficiency was not corrected within 24 hours and HAP was not abated. Questioned Costs None. Context We reviewed a sample of 3 of the Authority’s 30 failed inspections for HQS Enforcement requirements. Effect Tenant may be living in units that do not meet HQS. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review their procedures in following up on life threatening deficiencies to ensure they are corrected in the appropriate time frame. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendation.