FAC Explorer

Audit 43800

FY End
2022-12-31
Total Expended
$1.09M
Findings
6
Programs
4
Organization: Crookston Housing and Economic Development Authority (MN)
Year: 2022 Accepted: 2023-08-06
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
44744 2022-002 Material Weakness - B
44745 2022-003 Significant Deficiency - E
44746 2022-004 Significant Deficiency Yes L
621186 2022-002 Material Weakness - B
621187 2022-003 Significant Deficiency - E
621188 2022-004 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $908,460 Yes 3
14.850 Public and Indian Housing $128,491 - 0
14.872 Public Housing Capital Fund $26,145 - 0
10.854 Rural Economic Development Loans and Grants $24,750 - 0

Contacts

Name Title Type
UG2AQKJ4KCK5 Karie Kirschbaum Auditee
2182803049 Brian Opsahl Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the accompanying schedule of expenditures of federal awards (theSchedule) are reported on the accrual basis of accounting. Such expenditures are recognizedfollowing the cost principles contained in the Uniform Guidance, wherein certain types ofexpenditures are not allowable or are limited as to reimbursement. Negative amounts shown onthe Schedule represent adjustments or credits made in the normal course of business toamounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule includes the federal award activity of the Crookston Housing and EconomicDevelopment Authority under programs of the federal government for the year ended December31, 2022. The information in this Schedule is presented in accordance with the requirements ofTitle 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSchedule presents only a selected portion of the operations of the Authority, it is not intended toand does not present the financial position, changes in net position, or cash flows of theAuthority.

Finding Details

Finding 2022-002
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Allowable Costs/Cost Principles Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Material Weakness Criteria Amounts paid under the Section 8 Vouchers Program must meet allowable costs/cost principles per HUD?s annual guidance. Condition During our testing of disbursements, we noted five instances of the Authority not having documentation to support a fifty percent allocation of payroll costs to the vouchers program. Questioned Costs Undeterminable. Context We reviewed a random sample of twenty-five disbursements from the Section 8 Vouchers Program. Effect The allocated payroll costs to the Section 8 Vouchers Program were undeterminable due to the fact that no documentation support for the allocation was provided. Cause The Authority experienced turnover in the Section 8 program. As a result, payroll allocation documentations were not saved as the previous year allocations were used. Repeat Finding This is not a repeat finding from the prior year. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with adequate documentation. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2022-003
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Eligibility for Individuals Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Significant Deficiency Criteria The PHA must obtain and document in the family file third party verification of reported family annual income; the value of assets; expenses related to deductions from annual income; and other factors that affect the determination of adjusted income or income based rent (24 CFR section 982.516). Condition During our testing of fourteen tenant files, we noted that one file did not retain documentation verifying the loss of a job for a tenant. Questioned Costs None Context We reviewed a random sample of fourteen tenant files for a tenant?s HAP amount. Effect The loss of job of a tenant was not documented adequately for determining the tenant?s income. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper documentation. Repeat Finding This is not a repeat finding from the prior year. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with special tests requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2022-004
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Reporting ? Voucher for Payment of Annual Contributions and Operating Statement Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Significant Deficiency Criteria The Authority is required to submit the Voucher for Payment of Annual Contributions and Operating Statement report monthly to HUD via the Voucher Management System (VMS). Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the Voucher for Payment of Annual Contribution and Operating Statement using VMS. Questioned Costs None Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper reporting. Repeat Finding This is a repeat of finding 2021-004. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with reporting requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2022-002
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Allowable Costs/Cost Principles Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Material Weakness Criteria Amounts paid under the Section 8 Vouchers Program must meet allowable costs/cost principles per HUD?s annual guidance. Condition During our testing of disbursements, we noted five instances of the Authority not having documentation to support a fifty percent allocation of payroll costs to the vouchers program. Questioned Costs Undeterminable. Context We reviewed a random sample of twenty-five disbursements from the Section 8 Vouchers Program. Effect The allocated payroll costs to the Section 8 Vouchers Program were undeterminable due to the fact that no documentation support for the allocation was provided. Cause The Authority experienced turnover in the Section 8 program. As a result, payroll allocation documentations were not saved as the previous year allocations were used. Repeat Finding This is not a repeat finding from the prior year. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with adequate documentation. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2022-003
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Eligibility for Individuals Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Significant Deficiency Criteria The PHA must obtain and document in the family file third party verification of reported family annual income; the value of assets; expenses related to deductions from annual income; and other factors that affect the determination of adjusted income or income based rent (24 CFR section 982.516). Condition During our testing of fourteen tenant files, we noted that one file did not retain documentation verifying the loss of a job for a tenant. Questioned Costs None Context We reviewed a random sample of fourteen tenant files for a tenant?s HAP amount. Effect The loss of job of a tenant was not documented adequately for determining the tenant?s income. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper documentation. Repeat Finding This is not a repeat finding from the prior year. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with special tests requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.
Finding 2022-004
Federal Program ? Section 8 Housing Choice Voucher Program AL #14.871 ? Reporting ? Voucher for Payment of Annual Contributions and Operating Statement Federal Program Section 8 Housing Choice Vouchers AL #14.871 ? Significant Deficiency Criteria The Authority is required to submit the Voucher for Payment of Annual Contributions and Operating Statement report monthly to HUD via the Voucher Management System (VMS). Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the Voucher for Payment of Annual Contribution and Operating Statement using VMS. Questioned Costs None Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual. Cause The Authority experienced turnover in the Section 8 program. As a result, controls were not in place to ensure proper reporting. Repeat Finding This is a repeat of finding 2021-004. Recommendation We recommend that the Authority implement proper internal controls to ensure the Authority?s compliance with reporting requirements. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.