FAC Explorer

Audit 409620

FY End
2025-12-31
Total Expended
$2.59M
Findings
1
Programs
4
Organization: Housing Authority of Somerset (KY)
Year: 2025 Accepted: 2026-08-24
Auditor: LANE AND COMPANY LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1227609 2025-001 Material Weakness Yes L

Programs

ALN Program Spent Major Findings
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $1.69M Yes 1
14.850 PUBLIC AND INDIAN HOUSING $487,632 Yes 0
14.872 PUBLIC HOUSING CAPITAL FUND $290,066 Yes 0
14.000 Emergency Housing Choice Vouchers $125,434 Yes 0

Contacts

Name Title Type
PDBJE3KPDKB5 Austyn Fitzpatrick Auditee
6066791332 Joel Lane Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards is a summary of the activity of the Authority’s federal award program and does present transactions that would be included in financial statements of the Authority presented on the accrual basis of accounting as contemplated by generally accepted accounting principles. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowed or are limited to reimbursement.

Finding Details

Finding 2025-001
Criteria:HUD requires housing authorities to prepare and electronically submit accurate and complete unaudited financial information through the Real Estate Assessment Center (REAC) Financial Assessment Subsystem within the required reporting deadlines. Effective internal controls should include adequate review procedures to ensure financial information submitted to REAC is complete, accurate, supported by the Authority’s accounting records, and filed timely. Condition: During our audit procedures, we noted deficiencies in the Housing Authority’s internal controls related to the preparation and filing of the unaudited REAC submission. Specifically: The prior year audit adjusting entries were not recorded in the general ledger. Equity was seemingly plugged in REAC to force the financial statements to balance rather than recording the audit adjusting entries in the general ledger. Cause: The deficiencies appear to result from inadequate supervisory review, insufficient formalized procedures over the REAC submission process, and limited segregation of duties related to the preparation and filing of financial information. Effect: Weak internal controls over the unaudited REAC submission process increase the risk that inaccurate or incomplete financial information may be submitted to HUD. Errors in submitted data could negatively impact HUD assessments, reporting compliance, and management decision-making. Recommendation: We recommend the Housing Authority strengthen internal controls over the preparation and filing of unaudited REAC submissions by implementing formal review and approval procedures, maintaining supporting documentation for all submitted amounts, and ensuring submitted financial information is reconciled to the Authority’s accounting records prior to filing. Management should also establish a documented review checklist to verify completeness and accuracy before submission. Management Response: Management agrees with the finding and will implement additional review procedures and documentation requirements to improve the accuracy and oversight of future REAC submissions.