Audit 405955

Criteria: 24CFR982-516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as complete and accurate tenant files. Condition: During my teting, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant eligibility requirements. Questioned Cost: None. Context: Testing of 25 tenant files identified an exception in 7 files as follows-7 files did not contain proper documentation of the Section 214 Declaration of Citizenship Status forms. Cause: The Agency did not follow their eligibility intace procedures properly. Effect: The Authority is not in compliance with requirements regarding eligibility. Repeat Finding: Yes. Recommendation: I recommend that the Authority continue to review recertifications on a monthly basis to ensure the files meet eligiblity and reporting requirements. Views of Responsible Officials: Management agrees with this finding. We have reviewed the intake procedure and will continue to review recertifications.

Criteria: 2 CFR200.302 requires the auditee must maintain accurate, current and complete disclosure of the finacial results of each federal award. Condition: As of Sept 30, 2025 the Authority's HAP expense and RNP balance in VMS do not match the general ledger. Questioned Cost: $0. Context: N/A. Cause: The variance occured because management did not perform monthly reconciliations between the accounting software and VMS submissions. Additionally, there is a lack of independent supervisory review to ensure that all manual data entries into VMS accurately reflect the underlying trial balance. Effect: Failure to reconcile these records impairs financial accountability and can result in inaccurate financial reporting on the FDS. Furthermore, unreconciled differences may lead to over-funding or under-funding of HAP reserves by HUD, necessitating future funding adjustments. Repeat Finding: No. Recommendation: I recommend that management immediately prepare and doucment a comprehensive retroactive reconciliation between the general ledger and VMS for the year ended Sept 30, 2025. Moving forward, management should implement a mandatory monthly reconciliation checklist. Any discrepancies identified during the reconciliation must be investigated, resolved and documented prior to submitting the monthly VMS data to HUD. Views of Responsible officials: Management agrees with the finding. The accounting department will perform monthly reconciliations with the VMS and general ledger, and any discrepancies will be addressed immediately.