FAC Explorer

Audit 403190

FY End
2025-09-30
Total Expended
$8.24M
Findings
1
Programs
4
Organization: Rowan County Housing Authority (NC)
Year: 2025 Accepted: 2026-06-08
Auditor: SMITH MARION & CO

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1216745 2025-001 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $6.84M Yes 1
14.850 PUBLIC HOUSING OPERATING FUND $995,198 Yes 0
14.872 PUBLIC HOUSING CAPITAL FUND $301,635 Yes 0
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $105,740 Yes 0

Contacts

Name Title Type
DZDKLLCR8PP7 Jamie Lester Auditee
7046338380 Chad Porter Auditor
No contacts on file

Notes to SEFA

The accompanying schedule presents the expenditures incurred (and related awards received) by the Rowan County Housing Authority that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule.
The expenditures included in the accompanying schedule were reported on an accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program.
During the fiscal year ended September 30, 2025, the Rowan County Housing Authority disbursed no federal funds to subrecipients.
Rowan County Housing Authority has elected not to use the 15% de minimis indirect cost rate as allowed in Uniform Guidance, Section 414.

Finding Details

Finding 2025-001
Payment Standards/Rent Reasonableness Questioned Costs None. Criteria According to 24 CFR 982.503(d) (3), "A PHA may establish exception payment standard amounts between 110 percent and 120 percent of the applicable FMR for such duration as HUD specifies by notice upon notification to HUD that the PHA meets at least one of the following criteria: (i) Fewer than 75 percent of the families to whom the PHA issued tenant-based rental vouchers during the most recent 12-month period for which there is success rate data available have become participants in the voucher program; (ii) More than 40 percent of families with tenant-based rental assistance administered by the agency pay more than 30 percent of adjusted income as the family share; or (iii) Such other criteria as the Secretary establishes by notice." Additionally, The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a)before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition For 2023, the Authority was approved by HUD to use 120% FMRs. During the audit, we found that the Authority's approved payment standards for 2024 conintued to use 120% of the HUD's FMR standard. They were using this without contineuded approval from HUD. Context During the audit, the auditor selected 40 tenants to test for eligibility and special tests. Out of the 40, 13 tenants on the 50058 used the 120% payment standard. Cause Management continued to use the 120% threshold after the HUD approval had expired. The Authority did not get required approval to continue beyond 2023 to use the 120% FMR theshold. Effect The Authority used incorrect FMRs to approve payments for HAP. This resulted in more HAP expense and revenue because tenants were housed in housing over the HUD approved 120% FMR rate. Reccomendations The Auditor recommends the Authority return to the 110% threshold approved by HUD. Management Views Management Agrees, see Corrective Action Plan.