FAC Explorer

Audit 362848

FY End
2024-12-31
Total Expended
$22.61M
Findings
4
Programs
3
Organization: Hsg Authority of the City of Lakewood Dba Metro West Housing Solutions (CO)
Year: 2024 Accepted: 2025-07-23
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
571829 2024-001 Material Weakness Yes N
571830 2024-002 Significant Deficiency - N
1148271 2024-001 Material Weakness Yes N
1148272 2024-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $22.09M Yes 2
14.239 Home Investment Partnerships Program $499,000 - 0
14.218 Community Development Block Grants/entitlement Grants $20,000 - 0

Contacts

Name Title Type
N6UPRK4X5XE4 Leigh Jesaitis Auditee
3039877512 Jodi Daugherty 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. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the Housing Authority of the City of Lakewood dba Metro West Housing Solutions (the Authority) under programs of the federal government for the year ended December 31, 2024. The information 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 present the financial position, changes in net position, 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. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis cost rate. Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient.
Title: NOTE C - INDIRECT COST RATE Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis cost rate. The Authority has not elected to use the 10% de minimis cost rate.

Finding Details

Finding 2024-001
2024-001 Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: HQS Enforcement and Inspections Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients perform inspections of properties where tenants receiving Housing Assistance Payments reside and when inspections fail, re-inspections must be performed within 30 days for non-life-threatening issues and within 24 hours for life-threatening issues. In addition, the Housing Choice Voucher program requires inspections on these units to be performed at a minimum of once biennially. Condition: Metro West Housing Solutions did not perform re-inspections of 17 failed inspections within the prescribed 30-day or 24-hour requirement during 2024. In addition, HAP was not properly reviewed for possible abatement for these tenants. Metro West Housing Solutions also did not perform inspections of 2 units within the biennial requirement. Cause: Controls over inspections that are a part of special tests and provisions were not properly designed to ensure that re-inspections of properties occurred within 30 days or 24 hours of a failed inspection, thus resulting in a deficiency of internal control. In addition, controls were not properly designed to ensure inspections were occurring at a minimum of biennially. Effect: Metro West Housing Solutions could be issuing HAP for properties that are not up to code or potentially dangerous for their recipients if inspections fail and re-inspections are not occurring timely. In addition, an abatement of HAP might be missed if the re-inspections are not occurring timely. Questioned Costs: None reported Context/Sampling: We tested 60 out of a population of over 250 failed inspections during 2024 based on maximum risk of material noncompliance. In addition, we tested 60 out of a population of over 250 eligible tenants during 2024 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend management revisit controls over follow-up on failed or incomplete inspections to correct this matter and ensure no further findings occur. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-002
2024-002 Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: Reasonable Rent Immaterial Instance of Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients must determine that rent to the owner is reasonable in comparison to rent for other comparable unassisted units. Condition: Metro West Housing Solutions did not determine rent reasonableness for 2 tenants during 2024. In addition, Metro West Housing Solutions did not follow their internal controls in place to determine rent reasonableness for 3 tenants, and internal controls in place did not prevent the missing determinations on the tenants noted. Cause: Controls over reasonable rent determination that are a part of special tests and provisions were not properly designed to ensure that comparisons were taking place. Effect: As a result of the failure to determine reasonable rent for units leased under the Housing Choice Voucher program, there is an increased risk that Metro West Housing Solutions is overpaying landlords, which can result in noncompliance with HUD regulations. Questioned Costs: None reported Context/Sampling: We tested 60 out of a population of over 250 new leases during 2024 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): No Recommendation: We recommend management revisit controls to ensure that reasonable rent determinations are conducted and documented in accordance with HUD requirements. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-001
2024-001 Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: HQS Enforcement and Inspections Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients perform inspections of properties where tenants receiving Housing Assistance Payments reside and when inspections fail, re-inspections must be performed within 30 days for non-life-threatening issues and within 24 hours for life-threatening issues. In addition, the Housing Choice Voucher program requires inspections on these units to be performed at a minimum of once biennially. Condition: Metro West Housing Solutions did not perform re-inspections of 17 failed inspections within the prescribed 30-day or 24-hour requirement during 2024. In addition, HAP was not properly reviewed for possible abatement for these tenants. Metro West Housing Solutions also did not perform inspections of 2 units within the biennial requirement. Cause: Controls over inspections that are a part of special tests and provisions were not properly designed to ensure that re-inspections of properties occurred within 30 days or 24 hours of a failed inspection, thus resulting in a deficiency of internal control. In addition, controls were not properly designed to ensure inspections were occurring at a minimum of biennially. Effect: Metro West Housing Solutions could be issuing HAP for properties that are not up to code or potentially dangerous for their recipients if inspections fail and re-inspections are not occurring timely. In addition, an abatement of HAP might be missed if the re-inspections are not occurring timely. Questioned Costs: None reported Context/Sampling: We tested 60 out of a population of over 250 failed inspections during 2024 based on maximum risk of material noncompliance. In addition, we tested 60 out of a population of over 250 eligible tenants during 2024 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend management revisit controls over follow-up on failed or incomplete inspections to correct this matter and ensure no further findings occur. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-002
2024-002 Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: Reasonable Rent Immaterial Instance of Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients must determine that rent to the owner is reasonable in comparison to rent for other comparable unassisted units. Condition: Metro West Housing Solutions did not determine rent reasonableness for 2 tenants during 2024. In addition, Metro West Housing Solutions did not follow their internal controls in place to determine rent reasonableness for 3 tenants, and internal controls in place did not prevent the missing determinations on the tenants noted. Cause: Controls over reasonable rent determination that are a part of special tests and provisions were not properly designed to ensure that comparisons were taking place. Effect: As a result of the failure to determine reasonable rent for units leased under the Housing Choice Voucher program, there is an increased risk that Metro West Housing Solutions is overpaying landlords, which can result in noncompliance with HUD regulations. Questioned Costs: None reported Context/Sampling: We tested 60 out of a population of over 250 new leases during 2024 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): No Recommendation: We recommend management revisit controls to ensure that reasonable rent determinations are conducted and documented in accordance with HUD requirements. Views of Responsible Officials: There is no disagreement with the audit finding.