Audit 53782

FY End

2022-03-31

Total Expended

$7.02M

Findings

2

Programs

3

Organization: Housing Authority of the City of Edinburg (TX)

Year: 2022 Accepted: 2022-12-05

Auditor: Luis C Orozco Certified Public Accountant

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
50265	2022-002	Significant Deficiency	-	E
626707	2022-002	Significant Deficiency	-	E

ALN	Program	Spent	Major	Findings
14.871	Section 8 Housing Choice Vouchers	$5.18M	Yes	1
14.872	Public Housing Capital Fund	$373,986	-	0
14.850	Public and Indian Housing	$190,220	-	0

Contacts

Name	Title	Type
WGC5M8CL9KK1	Dr. Martin Castillo	Auditee
9563833839	Luis C Orozco	Auditor
No contacts on file

Notes to SEFA

Accounting Policies: The Housing Authority uses the fund types specified by the Governmental AccountingStandards Board. Special revenue funds are used to account for resources restricted to, ordesignated for, specific purposes. Federal and state financial assistance generally is accountedfor in a Special Revenue Fund because it is restricted for specific purposes.? The accounting and financial reporting treatment applied to a fund is determined by itsmeasurement focus. The Governmental Fund types are accounted for using a current financialresources measurement focus called the modified accrual basis of accounting. Nearly allFederal grant funds were accounted for in a Special Revenue Fund which is a GovernmentalFund type. With this measurement focus, only current assets and current liabilities and the fundbalance are included on the balance sheet. Operating statements of these funds present increasesand decreases in net current assets.The modified accrual basis of accounting recognizes revenues in the accounting period inwhich they become susceptible to accrual, i.e., both measurable and available, and expendituresin the accounting period in which the fund liability is incurred, if measurable, except forunmatured interest on General Long-Term Debt, which is recognized when due, and certaincompensated absences and claims and judgments, which are recognized when the obligationsare expected to be liquidated with expendable available financial resources.Usually Federal grant funds are considered to be earned to the extent of expenditures madeunder the provisions of the grant. When Federal grant funds are received before relatedexpenditures are made, they are recorded as deferred revenues.? The period of availability for federal grant funds for the purpose of liquidation of outstandingobligations made on or before the ending date of the federal project period extends 30 daysbeyond the federal project period ending date, in accordance with provisions in Section H,Period of Availability of Federal Funds, Part 3, OMB Uniform Guidance ComplianceStatement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

Finding 2022-002

Criteria- The Part C of HAP Contract Tenancy Addendum 2) Lease states; The owner has given the PHA a copy of the Lease including any revisions agreed by the owner and tenant. Condition- The review of a sample of Section 8 participant files revealed noncompliance with HAP Contract, Part C of HAP Contract Tenancy Addendum. There was no lease on file for 3 of the Section 8 participants. Additionally, one of the participant's landlord forms was not signed until 3 months after the tenant move in date. Context- Condition was identified as part of the compliance testing for the major program. Effect- Noncompliance with 24 CFR 982.451 Housing Assistance Payments Contract. Cause- Internal Control failure in the file approval and preparation process. Recommendation- The Housing Authority should review the internal control policies in place to ensure all Section 8 participants are in compliance with the HAP contract. Repeat Finding from Prior Year(s)- No View of Responsible Officials- See management?s corrective action plan.

Finding 2022-002

Criteria- The Part C of HAP Contract Tenancy Addendum 2) Lease states; The owner has given the PHA a copy of the Lease including any revisions agreed by the owner and tenant. Condition- The review of a sample of Section 8 participant files revealed noncompliance with HAP Contract, Part C of HAP Contract Tenancy Addendum. There was no lease on file for 3 of the Section 8 participants. Additionally, one of the participant's landlord forms was not signed until 3 months after the tenant move in date. Context- Condition was identified as part of the compliance testing for the major program. Effect- Noncompliance with 24 CFR 982.451 Housing Assistance Payments Contract. Cause- Internal Control failure in the file approval and preparation process. Recommendation- The Housing Authority should review the internal control policies in place to ensure all Section 8 participants are in compliance with the HAP contract. Repeat Finding from Prior Year(s)- No View of Responsible Officials- See management?s corrective action plan.