Audit 396286

2025-005. Interfund Receivable / Payable. Federal Awards: 14.871 – Section 8 Housing Choice Vouchers Compliance: Activities Allowed or Unallowed Type: Material weakness2025-005. Criteria: HUD has certain regulations and procedures which should be followed by the PHA. Specifically, HUD programs should not advance or accept loans to/from other HUD or non-HUD programs. Condition: At year end, the PHA had the following inter-program receivable/payable between programs: Program Due From (Due To) Business Activities $ 136,166 $ 1,750 State & Local 1,750 --- Housing Choice Voucher --- (136,166) $ 137,916 $ (137,916) Questioned Costs: None noted. Effect: Funds were advanced to other HUD/non-HUD programs. Cause: It appears that the Authority has not been diligent in ensuring all programs pay their share of expenses to other programs in a timely manner creating a significant balance of amount owed. Recommendation: I recommend that the Authority implement a plan where all programs owing other programs can re-pay in a timely manner. Management’s Response: Up to this point, many of the interfund transactions have occurred with automatic transactions programed by our paid Fee Accountant. Salina Housing Authority staff review the automatic transactions with our Fee Accountant to ensure all necessary transactions are taking place and the transactions are being coded into the correct account. The housing authority will work to ensure necessary transactions are properly recorded timely and accurately so that the accounts are correct and not underfunded.

2025-006. Under-funded Account Balance - Section 8 Administrative Equity Net Deficit. Federal Awards: 14.871 – Section 8 Housing Choice Vouchers Compliance: Reporting Type: Material weakness Criteria: The Authority must ensure all accounts are properly funded in compliance with HUD regulations. Condition: I noted that Section 8 Administrative Equity (UNP) had a net deficit in the amount of $154,713 at year-end. Questioned Costs: None noted. Effect: Unrestricted net position appears to be underfunded. Cause: It appears that the Authority understated certain administrative expenses during fiscal year 2025 resulting in net deficit on administrative equity account. Recommendation: I recommend the Authority ensure administrative expenses are properly recorded in order to earn adequate administrative revenues so that accounts don’t get underfunded. Management’s Response: Salina Housing Authority has not had an Executive Director since March 2025, so staff has heavily relied on the paid services of our Fee Accountant to maintain financial statements. However, it is apparent they do not always use the diligence and care that should be taken with our financials. Salina Housing Authority staff has been seeking training opportunities to increase understanding of financial reporting, this will continue. Salina Housing Authority staff will increase review process monthly to ensure accurate financial statements. This will include requesting a monthly meeting with our Fee Accountant to review all statements. It is also the plan of the Authority to have an Executive Director in place who already possesses the knowledge to review these financial statements monthly and be able dedicate the time necessary to ensure accuracy.