Audit 405638

Federal Program: 14.850 - Public Housing Criteria: Public Housing Authorities are disallowed from using Operating Funds as funding to other nonfederal programs. Condition: Public Housing Authorities have pooled cash and the COCC has had a negative cash balance over the past fiscal years. Cause: The Housing Authority is using public housing reserves to fund the COCC shortfall. The COCC is short on cash due to large receivables from tax credit properties. Effect: The Housing Authority is not in compliance with Public Housing Operating Fund compliance requirements regarding the use of operation funds. Questioned Costs: Not applicable. Information: Sampling was not applicable to this finding and is a systematic problem. Prior Year Finding: This was a prior year audit finding numbered 2024-002. Recommendation: It is recommended that the Housing Authority implements appropriate controls over Public Housing cash to ensure the proper use of operating funds. Management’s Response: In order to keep cash as accurate as possible, we will work to clear interfund as often as possible. With upcoming development revenue that we will see come in over the next 1-2 years on the non profit side, we will work to prioritize returning funds to the Public Housing Operating Funds. To prevent co-mingling of cash, we will begin a plan to break apart the funds for each program - Spencer, COCC, 3rd and 11th. Each quarter, we access payroll allocations to better reflect employees’ use of time and actual costs incurred by program and by LITC property. Public Housing and COCC training is planned that all finance staff will attend to make sure proper HUD procedures, rules, and guidelines are followed. The plan is to reduce the receivable down to $-0- as soon as possible and within 5 years.

Federal Program: 14.850 - Public Housing Criteria: Public Housing Authorities are required to reexamine family eligibility at least once every 12 months. Condition: When reviewing tenant files there were 3 out of 20 files sampled that did not have a timely reexamination completed for the audit period tested. Cause: Due to turnover of staff there were certain public housing tenants that did not have annual reexaminations completed. Effect: The Housing Authority not doing timely recertifications could lead to ineligible tenants receiving subsidized housing. Questioned Costs: Not applicable. Information: Sampling was determined to be statistically valid and the finding is a systematic problem. Prior Year Finding: This was a prior year audit finding numbered 2024-003. Recommendation: It is recommended that the Housing Authority implements appropriate controls over Public Housing examinations to ensure they are in compliance with eligibility requirements. Management’s Response: We have implemented a plan for proper training to make sure everyone is aware of HUD rules regarding family eligibility. We will complete a quarterly audit of randomly selected files to ensure we are adhering to HUD rules. We will ensure staff monitors eligibility for each resident within the required time frame.