Audit 404892

Insufficient Cash and Deficit of Unrestricted Net Position (Significant Deficiency and Other Noncompliance applicable to the Section 8 Housing Choice Voucher Program, Other Noncompliance applicable to the Public Housing Program) Public Housing Program – Assistance Listing No. 14.850a, Section 8 Housing Choice Voucher Program – Assistance Listing No. 14.871; Grant Period- Fiscal Year-End September 30, 2025 Criteria Section 8 Housing Choice Voucher Program administrative grants are provided and intended to fund administrative and operating costs of the Program except for housing assistance payments. Housing assistance payments are funded separately and independent of administrative grants. Administrative grants are established and published by HUD and are calculated based on the number of voucher units leased at the beginning of each month. Condition As of the beginning of fiscal year 2025 the Section 8 Housing Choice Voucher Program had an unrestricted net position deficit of $103,785. As of the end of fiscal year 2025 the Program had an unrestricted net position deficit of $169,864. During fiscal year 2025 the Program incurred an additional unrestricted net position deficit of $66,079. Additionally, the Public Housing Program advanced the Section 8 Housing Choice Voucher Program $71,841 during fiscal year 2025, which is an unallowable use of Public Housing Program assets. This is a repeat finding from the fiscal year 2024 independent audit (fiscal year 2024 Finding 2024-001). Questioned Costs - None Cause The fiscal year 2025 deficit is a result of charging administrative and operating costs to the Section 8 Housing Choice Voucher Program which exceed the administrative and operating costs HUD has agreed to fund. Effect Expense charges to the Section 8 Housing Choice Voucher Program in excess of expenses HUD has determined reasonably necessary, and cash borrowings from the Public Housing Program. Recommendation Recommendation- We recommend that the Authority analyze and evaluate charges and allocations to the Section 8 Housing Choice Voucher Program and budget administrative and applicable operating expenses of the Program within HUD’s administrative funding limits. Additionally, we recommend that the Authority abstain from advancing Public Housing Program assets to the Section 8 Housing Choice Voucher Program. Management’s Response The Authority will analyze and evaluate charges and allocations to the Section 8 Housing Choice Voucher Program and budget administrative and applicable operating expenses of the Program within HUD’s administrative funding limits. Additionally, the Authority will abstain from advancing Public Housing Program assets to the Section 8 Housing Choice Voucher Program. Jebidiah Jackson, Executive Director, has assumed the responsibility of executing this corrective action as of August 1, 2026.

Non-compliance with Cash Management Requirements of the Capital Fund Program (Other Noncompliance) Capital Fund Program – Assistance Listing No. 14.872, Grant Period- Fiscal Year-End September 30, 2025 Criteria Uniform Guidance Cash Management requirements of the Capital Fund Program require the Authority to minimize time elapsing between the transfer of funds from the U.S. Treasury and disbursement to the applicable contractors or vendors (2 CFR Section 200.305.b). Condition As of the beginning of fiscal year 2025 the Authority held $179,995 of unexpended Capital Fund Program grant draws. Instead of funding Capital Fund Program expenditures from these unexpended funds during the fiscal year 2025, the Authority continued to draw funds from Capital Fund Program grants to fund fiscal year 2025 expenditures. Further, during fiscal year 2025 the Authority drew an additional $475,945 of Capital Fund Program grant proceeds, which were not expended during the fiscal year and resulted in cumulative unexpended grant draws (unearned grant revenue) as of September 30, 2025 of $655,940. Questioned Costs - None Cause Lack of sufficient understanding of Cash Management Requirements of the Capital Fund Program. Effect Non-compliance with Uniform Guidance Cash Management requirements of the Capital Fund Program. Recommendation With the exception of Capital Fund Program grant authorizations budged for Public Housing Program operating assistance (Capital Fund Grant Budget Line Item 1406), we recommend that the Authority expend the unexpended Capital Fund Program grant proceeds held prior to drawing down additional funding from Capital Fund Program grants.Management’s Response Management's Response- With the exception of Capital Fund Program grant authorizations budged for Public Housing Program operating assistance, the Authority will expend the unexpended Capital Fund Program grant proceeds held prior to drawing down additional funding from Capital Fund Program grants. Jebidiah Jackson, Executive Director, has assumed the responsibility of executing this corrective action as of August 1, 2026.