Audit 400132

FY End

2025-06-30

Total Expended

$2.72M

Findings

1

Programs

1

Organization: Housing Authority of the City of Salisbury (NC)

Year: 2025 Accepted: 2026-04-29

Auditor: BERNARD ROBINSON & COMPANY LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
1210843	2025-001	Material Weakness	Yes	E

ALN	Program	Spent	Major	Findings
14.195	PROJECT-BASED RENTAL ASSISTANCE (PBRA)	$2.72M	Yes	1

Contacts

Name	Title	Type
YFKUWYC2G8R1	Rod Kesler	Auditee
7046361410	Rachel Clupper	Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Housing Authority of the City of Salisbury, NC, under programs of the federal government for the year ended June 30, 2025. 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 Housing Authority of the City of Salisbury, NC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Housing Authority of the City of Salisbury, NC. The Housing Authority of the City of Salisbury, NC has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.

The Housing Authority of the City of Salisbury, NC provided no federal awards to subrecipients during the fiscal year ended June 30, 2025.

The Housing Authority of the City of Salisbury, NC received no federal awards of non-monetary assistance during the fiscal year ended June 30, 2025.

Finding Details

Finding 2025-001

Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program: Section 8 Housing Assistance Payments Assistance Listing (ALN): 14.195 Award Period: July 1, 2024 - June 30, 2025 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria: Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards and to maintain records that adequately support compliance with federal statutes, regulations, and award terms (2 CFR 200.303 and 2 CFR 200.302). In addition, the HUD Handbook 4350.3, Section 7-2, requires owners/agents to process interim certifications when tenant income changes and to adjust assistance accordingly. Statement of Condition: During the fiscal year ended June 30, 2025, we identified one tenant file where a change in income was not properly calculated, and the HUD Form 50059 was not adjusted and the necessary repayment agreement executed. We noted three other files that had missing required eligibility documents or were not retained in accordance with HUD recordkeeping requirements. Context: The population size is 465 units which are eligible for Section 8 Assistance Payments. A sample of forty tenant files totaling $320,352 of rental assistance were tested to determine if the tenant files were in accordance with eligibility compliance requirements. Of the forty tenant files, one tenant file tested contained an incorrect income calculation that was not corrected through a corrected HUD Form 50059 and related repayment agreement. By extrapolating our identified error rate on tenant files tested that were incorrectly calculated (0.95%) over the total population of HUD Section 8 rental assistance payments for the year ended June 30, 2025 of $2,719,677; $25,941 of rental assistance could be noncompliant based on the above error rate. Questioned Cost: $25,941 Cause: Personnel turnover resulted in the missed adjustment. Effect: An incorrect amount of rental assistance was requested from HUD Section 8 funds. Repeat Finding: No Recommendation: We recommend that management implement proper training and cross-training for staff to ensure accurate calculation of rental assistance and timely completion of interim certifications whenever required. Additionally, we recommend providing a refresher training to staff on HUD Section 8 documentation standards. Views of Responsible Officials: Management agrees with the finding.