Low Rent Program-ALN#14.850 Finding 2025-002-Internal Control Over Compliance Needs Improvement-Eligibility Criteria and Condition It appears that there was not a representative check of tenant file and waiting list functions by a qualified second party. Auditing Statement of Auditing Standards (SAS) #115 dictates that either “absent or inadequate segregation of duties within a significant account or process” are defined by the Standard as at least a significant deficiency, if not a material weakness. The lack of a documented check noted in the first sentence is considered an inadequate segregation of duties. Context We reviewed twenty-five Low Rent files. We did not note any exceptions. Effect Risk is reduced to an acceptable level that systematic errors are timely detected. Cause Apparent oversight. Recommendation Quality control checks of the waiting list and all tenant file procedures should be timely made and documented. Annual inspections should be done, documented, and available for third party review. Enterprise Income Verification [EIV] should be done, documented and available for third party review. Leases should be redone at least annually. View of Responsible Official We have recently designated
Low Rent-ALN#14.850 Finding 2025-003-Inventory of Maintenance Equipment and Office Furniture Should Be Updated-Special Tests Criteria and Condition Federal regulations require the authority to update its inventory of equipment and office furniture at least every two years. Context A partial inventory was taken early in 2025. However, new management asserts the inventory methods were substandard (we agree). Effect The estimated effect of non-compliance is likely minimal. The office and Maintenance shop have not been moved or remodeled. The E.D. and Procurement officer are aware of the whereabouts of all authority-owned vehicles and who drives them. Cause Oversight by management. Questioned Cost None Recommendation There are various ways to document an update of the inventory. A common method is to tag with a number all items. Small items such as screw drivers can be disregarded. Then, on Excel or something similar, a description such as “Maint Area” is entered on an assigned page, and the numbered items for that area are listed. The inventory should be checked at least every two years. View of Responsible Official We plan to improve our methods and we will take another inventory.
Low Rent Program-ALN#14.850 and Housing Choice Voucher Program #14.871- Allowable Costs Finding 2025-001-Interfund Payables Need To Be Reduced Criteria and Condition Funds may not be permanently used and thus transferred between funds. Low Rent funds must ultimately be used for Low Rent purposes, Housing Choice Voucher (HCV) funds used for HCV purposes, etc. Funds may be temporarily loaned in essence, when one fund pays overhead for the other, such as a split payroll. However, the loans should be promptly repaid, and the interfund receivables and payables kept to a minimum and in an evergreen situation. Context The amount owed by the Component Unit to the General Fund has increased from $15,042 at June 30, 2023 to $246,933 at June 30, 2025. In addition, the amount owed by the HCV Fund has increased from $2,774 to $66,457 at June 30, 2025. Effect The risk is increased by the substantial amounts currently owed that the Low Rent program might not be repaid. Thus, ineligible transfers would exist. Cause The current Executive Director assumed this position in December 2025, after year end. The prior E.D. was likely aware that funds exist to repay the balances owed, as noted in View of Responsible Officials below. Questioned Cost None Recommendation Management should continue to review for ways and means to reduce the interfund amounts. Views of Responsible Officials and Planned Corrective Actions I am Anna Richman, Executive Director and Designated Person to answer these findings. As a new E.D., I have only recently become aware of this situation. To reduce the interfund amounts, the avenues we may pursue include but are not limited to the following: Nonfederal funds are maintained in the State and Local Fund. For reporting purposes, this fund is combined with the Low Rent program to comprise the General Fund. We may transfer some of these nonfederal funds to the Component Unit and the HCV Fund to allow them to reduce the interfund loans. Nonfederal funds may be used for this purpose. In addition, we may transfer an increased percentage of the HCV Admin fee to be periodically transferred to the General Fund. We also note that if and when the tangible property of the Veterans Resource Center is ever sold, the funds would revert to the General Fund.