FAC Explorer

Audit 37486

FY End
2022-06-30
Total Expended
$2.99M
Findings
2
Programs
3
Organization: Housing Authority of the City of Martinsburg (WV)
Year: 2022 Accepted: 2023-01-27
Auditor: Rector Reeder & Lofton PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
41451 2022-001 Material Weakness - C
617893 2022-001 Material Weakness - C

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.87M Yes 0
14.850 Public and Indian Housing $858,422 Yes 0
14.872 Public Housing Capital Fund $259,440 Yes 1

Contacts

Name Title Type
SNHPQQX66EM8 Catherine Dodson Auditee
3042638891 Dale R. Rector Auditor
No contacts on file

Notes to SEFA

Title: 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, 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 auditee did not use the de minimis cost rate. 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 June 30, 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 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 assets, or cash flows of the Authority.
Title: SUBRECIPIENTS 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. 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 auditee did not use the de minimis cost rate. The Authority provided no federal awards to subrecipients during the fiscal year ending June 30, 2022.
Title: DISCLOSURE OF OTHER FORMS OF ASSISTANCE 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. 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 auditee did not use the de minimis cost rate. ?The Housing Authority of the City of Martinsburg received no federal awards of non-monetary assistance that are required to be disclosed for the year ended June 30, 2022.?The Housing Authority of the City of Martinsburg had no loans, loan guarantees, or federally restricted endowment funds required to be disclosed for the fiscal year ended June 30, 2022.?The Housing Authority of the City of Martinsburg maintains the following limits of insurance as of June 30, 2022:Property$20,802,405Commercial Auto1,000,000Liability 1,000,000Public Officials Liability1,000,000Worker CompensationstatutorySettled claims have not exceeded the above commercial insurance coverage limits over the past three years.

Finding Details

Finding 2022-001
Finding 2022-001 ? Capital Fund Program Accounting ? Noncompliance & Material Weakness ? Cash Management & Program Compliance ? CFDA # 14.872 ? Grant years 2018, 2019 Criteria: Appropriate cash management policies and procedures should facilitate the timely request and reimbursement of allowable HUD grant expenses. Per the Capital Fund Guidebook, ?once funds are disbursed, i.e. transferred from LOCCS to the PHA?s bank account, the PHA must pay the applicable bill(s) within 3 business days after the deposit of the funds into the PHA?s bank account. PHAs cannot expend nonfederal funds first to pay the applicable bills and then use Capital Funds to reimburse themselves.? Condition: Upon review of the year-end financial statements and capital fund accounting and reporting we have determined that a deficiency in funding at June 30, 2022 for CFP 501-18 and 501-19 in the amount of $386,903.44. This means that the PHA incurred costs in excess of funds drawn down from the eLoccs HUD system. The PHA is not properly managing cash flow in regards to the expenditures of CFP costs and subsequent requisition of funding from HUD via eLoccs. There should be a system in place which provides for the immediate expensing and then requisitioning of funds from HUD. Cause & Effect: Failure to request reimbursements for incurred grant costs in a timely fashion led to a year-end accounts receivable balance in the Capital Fund program of $386,903.44, which required using funds from other sources to cover the capital fund program costs. Recommendation: We recommend that the PHA establish an appropriate cash management procedure that facilitates timely requests and reimbursements of grant costs as incurred.
Finding 2022-001
Finding 2022-001 ? Capital Fund Program Accounting ? Noncompliance & Material Weakness ? Cash Management & Program Compliance ? CFDA # 14.872 ? Grant years 2018, 2019 Criteria: Appropriate cash management policies and procedures should facilitate the timely request and reimbursement of allowable HUD grant expenses. Per the Capital Fund Guidebook, ?once funds are disbursed, i.e. transferred from LOCCS to the PHA?s bank account, the PHA must pay the applicable bill(s) within 3 business days after the deposit of the funds into the PHA?s bank account. PHAs cannot expend nonfederal funds first to pay the applicable bills and then use Capital Funds to reimburse themselves.? Condition: Upon review of the year-end financial statements and capital fund accounting and reporting we have determined that a deficiency in funding at June 30, 2022 for CFP 501-18 and 501-19 in the amount of $386,903.44. This means that the PHA incurred costs in excess of funds drawn down from the eLoccs HUD system. The PHA is not properly managing cash flow in regards to the expenditures of CFP costs and subsequent requisition of funding from HUD via eLoccs. There should be a system in place which provides for the immediate expensing and then requisitioning of funds from HUD. Cause & Effect: Failure to request reimbursements for incurred grant costs in a timely fashion led to a year-end accounts receivable balance in the Capital Fund program of $386,903.44, which required using funds from other sources to cover the capital fund program costs. Recommendation: We recommend that the PHA establish an appropriate cash management procedure that facilitates timely requests and reimbursements of grant costs as incurred.