2022-003 ? PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2022. As a result of our procedures, we identified the following deviations from the Authority?s policy: ? One instance in which the Authority did not competitively procure services exceeding $50,000. ? Seven instances in which the Authority did not document an Independent Cost Estimate ? Four instances in which a bid solicitation/advertisement could not be located. ? Two instances in which the Authority did not appear to use the correct procurement methodology. ? Seven instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS We have identified known questioned costs of those purchases not competitively procured and charged directly to the Public and Indian Housing or Public Housing Capital Fund Programs. Known Questioned Costs ? Public and Indian Housing ? $61,512 CONTEXT All procurements must be made in accordance with the Authority?s procurement policy. We selected a sample of seven procurements representing total expenditures of $1,500,203. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: ? Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. ? Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority?s procurement policy are accounted for in each procurement action. ? Provide sufficient procurement training to all employees responsible for procurement. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-004 ? ALLOWABLE COSTS/COST PRINCIPLES Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a Be necessary and reasonable for the performance of the Federal award and be allocable thereto und these principles. b Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonFederal entity. d Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e Be determined in accordance with generally accepted accounting principles GAAP, except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. f Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g Be adequately documented. 2 CFR Chapter 1 Part 200 200.403 CONDITION The Authority?s purchasing process does not adequately document approval of the purchase or coding of the transaction. CAUSE The Authority does not utilize purchase orders and has no consistent alternative procedure for documenting the authorization of purchases. EFFECT Ineligible purchases could be processed and charged to the Authority?s federal programs without detection. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 40 purchase transactions. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority institute written authorization procedures for purchasing. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-005 ? REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program CRITERIA Financial Reports (0MB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the Public and Indian Housing Program. CONDITION The unaudited FDS was required to be submitted to HUD by September 15, 2022. The Authority submitted the FDS on September 30, 2022. CAUSE The Authority?s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING This is a repeat of finding 2021-001 from the prior year. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-006 ? SPECIAL TESTS & PROVISIONS: DEPOSITORY AGREEMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program CRITERIA PHAs are required to enter into General Depository Agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form as required by HUD in the ACC. The agreements serve as safe guards for federal funds and provide third party rights to HUD (Section 9 of the ACC). CONDITION The Authority has no active depository agreements with any financial institutions with which federal funds are deposited. CAUSE The Authority?s treasury controls did not account for the need for depository agreements. EFFECT The Authority?s federal funds are not adequately safeguarded. QUESTIONED COSTS None identified. CONTEXT The Authority deposits federal funds with several different financial institutions; however, none have an executed depository agreement. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority execute depository agreements with all financial institutions as soon as possible. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-003 ? PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2022. As a result of our procedures, we identified the following deviations from the Authority?s policy: ? One instance in which the Authority did not competitively procure services exceeding $50,000. ? Seven instances in which the Authority did not document an Independent Cost Estimate ? Four instances in which a bid solicitation/advertisement could not be located. ? Two instances in which the Authority did not appear to use the correct procurement methodology. ? Seven instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS We have identified known questioned costs of those purchases not competitively procured and charged directly to the Public and Indian Housing or Public Housing Capital Fund Programs. Known Questioned Costs ? Public and Indian Housing ? $61,512 CONTEXT All procurements must be made in accordance with the Authority?s procurement policy. We selected a sample of seven procurements representing total expenditures of $1,500,203. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: ? Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. ? Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority?s procurement policy are accounted for in each procurement action. ? Provide sufficient procurement training to all employees responsible for procurement. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-004 ? ALLOWABLE COSTS/COST PRINCIPLES Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a Be necessary and reasonable for the performance of the Federal award and be allocable thereto und these principles. b Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonFederal entity. d Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e Be determined in accordance with generally accepted accounting principles GAAP, except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. f Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g Be adequately documented. 2 CFR Chapter 1 Part 200 200.403 CONDITION The Authority?s purchasing process does not adequately document approval of the purchase or coding of the transaction. CAUSE The Authority does not utilize purchase orders and has no consistent alternative procedure for documenting the authorization of purchases. EFFECT Ineligible purchases could be processed and charged to the Authority?s federal programs without detection. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 40 purchase transactions. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority institute written authorization procedures for purchasing. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-003 ? PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2022. As a result of our procedures, we identified the following deviations from the Authority?s policy: ? One instance in which the Authority did not competitively procure services exceeding $50,000. ? Seven instances in which the Authority did not document an Independent Cost Estimate ? Four instances in which a bid solicitation/advertisement could not be located. ? Two instances in which the Authority did not appear to use the correct procurement methodology. ? Seven instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS We have identified known questioned costs of those purchases not competitively procured and charged directly to the Public and Indian Housing or Public Housing Capital Fund Programs. Known Questioned Costs ? Public and Indian Housing ? $61,512 CONTEXT All procurements must be made in accordance with the Authority?s procurement policy. We selected a sample of seven procurements representing total expenditures of $1,500,203. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: ? Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. ? Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority?s procurement policy are accounted for in each procurement action. ? Provide sufficient procurement training to all employees responsible for procurement. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-004 ? ALLOWABLE COSTS/COST PRINCIPLES Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a Be necessary and reasonable for the performance of the Federal award and be allocable thereto und these principles. b Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonFederal entity. d Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e Be determined in accordance with generally accepted accounting principles GAAP, except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. f Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g Be adequately documented. 2 CFR Chapter 1 Part 200 200.403 CONDITION The Authority?s purchasing process does not adequately document approval of the purchase or coding of the transaction. CAUSE The Authority does not utilize purchase orders and has no consistent alternative procedure for documenting the authorization of purchases. EFFECT Ineligible purchases could be processed and charged to the Authority?s federal programs without detection. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 40 purchase transactions. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority institute written authorization procedures for purchasing. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-005 ? REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program CRITERIA Financial Reports (0MB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the Public and Indian Housing Program. CONDITION The unaudited FDS was required to be submitted to HUD by September 15, 2022. The Authority submitted the FDS on September 30, 2022. CAUSE The Authority?s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING This is a repeat of finding 2021-001 from the prior year. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-006 ? SPECIAL TESTS & PROVISIONS: DEPOSITORY AGREEMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program CRITERIA PHAs are required to enter into General Depository Agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form as required by HUD in the ACC. The agreements serve as safe guards for federal funds and provide third party rights to HUD (Section 9 of the ACC). CONDITION The Authority has no active depository agreements with any financial institutions with which federal funds are deposited. CAUSE The Authority?s treasury controls did not account for the need for depository agreements. EFFECT The Authority?s federal funds are not adequately safeguarded. QUESTIONED COSTS None identified. CONTEXT The Authority deposits federal funds with several different financial institutions; however, none have an executed depository agreement. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority execute depository agreements with all financial institutions as soon as possible. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-003 ? PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2022. As a result of our procedures, we identified the following deviations from the Authority?s policy: ? One instance in which the Authority did not competitively procure services exceeding $50,000. ? Seven instances in which the Authority did not document an Independent Cost Estimate ? Four instances in which a bid solicitation/advertisement could not be located. ? Two instances in which the Authority did not appear to use the correct procurement methodology. ? Seven instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS We have identified known questioned costs of those purchases not competitively procured and charged directly to the Public and Indian Housing or Public Housing Capital Fund Programs. Known Questioned Costs ? Public and Indian Housing ? $61,512 CONTEXT All procurements must be made in accordance with the Authority?s procurement policy. We selected a sample of seven procurements representing total expenditures of $1,500,203. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: ? Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. ? Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority?s procurement policy are accounted for in each procurement action. ? Provide sufficient procurement training to all employees responsible for procurement. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-004 ? ALLOWABLE COSTS/COST PRINCIPLES Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a Be necessary and reasonable for the performance of the Federal award and be allocable thereto und these principles. b Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonFederal entity. d Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e Be determined in accordance with generally accepted accounting principles GAAP, except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. f Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g Be adequately documented. 2 CFR Chapter 1 Part 200 200.403 CONDITION The Authority?s purchasing process does not adequately document approval of the purchase or coding of the transaction. CAUSE The Authority does not utilize purchase orders and has no consistent alternative procedure for documenting the authorization of purchases. EFFECT Ineligible purchases could be processed and charged to the Authority?s federal programs without detection. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 40 purchase transactions. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority institute written authorization procedures for purchasing. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.