Audit 378142

Finding 2025-002: Reconciliation and Reporting Reporting Public Housing Operating Fund AL# 14.850 Significant Deficiency Statement of Condition Certain general ledger activity, especially bank accounts and interfund balances, were not recorded or reconciled in a timely manner. Further, the Unaudited Financial Data Schedule (FDS) contained material errors and omissions. Criteria The Authority is responsible for designing, implementing, and maintaining effective internal control over financial reporting to ensure that financial transactions are accurately recorded, properly classified, and reported in accordance with U.S. generally accepted accounting principles. Controls should operate at a level of precision that prevents or detects material misstatements in a timely manner. Further, the FDS is the Authority’s primary means of reporting annual financial and programmatic information and is the basis for meeting financial statement reporting requirements as well as reporting federal expenditures to HUD. Cause Significant employee turnover in key positions within the Authority, including the unexpected loss of the newest Director of Finance. Effect or Potential Effect Significant yearend adjustments were required to report financial activity. In addition, the absence of timely recording and reconciliation reduces the routine review processes, thereby increasing the likelihood that errors, omissions, and misclassifications could occur. Recommendation We recommend the Authority reevaluate internal responsibilities over the internal accounting function to increase financial reconciliation capacity and reduce the reliance of accounting functions on a single position. Management’s Response Management agrees with the finding, see Corrective Action Plan for plan of action.

Finding 2025-003: Fee-for-Service Allowable Costs / Special Tests and Provisions Public Housing Operating FundAL#14.850 Significant Deficiency Statement of Condition Fees for services were not calculated or funded throughout the year, with fee amounts calculated and recorded during the yearend close process. Criteria PHA’s that establish a COCC shall fund non-project-specific costs through management fees from each property. Cause Significant employee turnover led to the suspension of management fee funding to the COCC during the year. Effect or Potential Effect COCC costs were indirectly funded by Public Housing Operating reserves due to COCC having insufficient funds to cover operating costs. Lack of management fee procedures increases the potential for noncompliance due to inability to monitor COCC financial performance. Recommendation We recommend the Authority provide additional support and training during new employee onboarding to specifically address the accounting and system procedures required comply with Authority policy and HUD regulations. Management’s Response Management agrees with the finding, see Corrective Action Plan for plan of action. .