ALN 14.871 – Housing Voucher Cluster – Reporting
Condition and Criteria:
As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Total, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2021. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS).
During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported.
Amount of Questioned Costs:
None.
Context:
During testing, we identified variances in the Data Collection Report lines for UNP and RNP when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated.
Cause:
The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP.
Effect:
Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding.
Auditor’s Recommendation:
We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements.
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.
ALN 14.850 – Public & Indian Housing – Operating Subsidy and Utilities Expense Level Calculation
Condition and Criteria:
Per 24 CFR § 990.170, a Public Housing Agency (PHA) must calculate Utilities Expense Level (UEL) based on its consumption for each utility, the applicable rates for each utility, and an applicable inflation factor. The UEL for a given funding period is the product of the utility rate multiplied by the payable consumption level multiplied by the inflation factor. The UEL is expressed in terms of Per Unit Month (PUM) costs. The utility rate for each type of utility will be the actual average rate from the most recent 12-month period that ended June 30th prior to the beginning of the applicable funding period. The rate will be calculated by dividing the actual utility cost by the actual utility consumption, with consideration for pass-through costs (e.g., state and local utility taxes, tariffs) for the time period specified in this paragraph.
During our testing of HUD forms 52722 and 52723 (Calculation of Operating Subsidy and Utilities Expense Level), it was determined that the PHA failed to correctly include sewer and water consumption in the 2021 UEL calculation for Project SC056000235. This omission was not detected prior to our audit, which indicates deficiencies in the PHA’s monitoring of the calculation of utilities expense level.
Amount of Questioned Costs:
None.
Context:
In testing the Authority’s Calculation of Operating Subsidy and Calculation of Utilities Expense Level, we noted that the calculation for the fiscal years ended June 30, 2021 omitted costs related to sewer consumption. The Authority’s procedures related to the monitoring of compliance with HUD regulatory requirements did not detect this prior to our audit.
Cause:
The Authority’s internal controls over the Low Rent Operating Subsidy and Utilities Expense Level calculation process that were in place lacked the necessary controls over monitoring of related HUD regulatory requirements.
Effect:
The Authority could be receiving subsidy amounts that are smaller than the Authority needs to operate on an annual basis. The Authority may not detect errors to the calculation of operating subsidy and utilities expense level in a timely manner.
Auditor’s Recommendation:
Implement procedures to monitor compliance with HUD regulatory requirements related to the Authority’s calculation of operating subsidy and utilities expense level. Management should implement some form of supervisory review process to ensure that operating subsidy and utilities expense level calculations are complete and accurate.
Grantee Response:
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.
ALN 14.871 – Housing Voucher Cluster – Reporting
Condition and Criteria:
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires the Data Collection Form to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Additionally, a nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements".
The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance), be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier.
Pursuant to the reporting requirements of 24 CFR, Part 5, Subpart H, entities receiving HUD financial assistance, must electronically submit audited financial and other information to the Real Estate Assessment Center ("REAC") no later than nine months after the Housing Authority's fiscal year end.
Amount of Questioned Costs:
None.
Context:
The fiscal year 2021 audit was not filed within nine months of fiscal year end due to prior management not completing their audit in a timely manner.
Cause:
Prior management's process for completing the audit was not adequate in filing the audit in a timely manner.
Effect:
The Housing Authority is not considered a low-risk auditee for fiscal year 2022 and must meet the 40% coverage rule for testing federal expenditures under the Uniform Guidance requirements.
Auditor’s Recommendation:
We recommend that the new management submit the annual financial statement audit and single audit, as applicable, in a timely manner and to ensure that the Data Collection Form is filed by the due date required in the Uniform Guidance
Grantee Response:
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.
ALN 14.871 – Housing Voucher Cluster – Reporting
Condition and Criteria:
As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Total, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2021. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS).
During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported.
Amount of Questioned Costs:
None.
Context:
During testing, we identified variances in the Data Collection Report lines for UNP and RNP when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated.
Cause:
The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP.
Effect:
Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding.
Auditor’s Recommendation:
We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements.
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.
ALN 14.850 – Public & Indian Housing – Operating Subsidy and Utilities Expense Level Calculation
Condition and Criteria:
Per 24 CFR § 990.170, a Public Housing Agency (PHA) must calculate Utilities Expense Level (UEL) based on its consumption for each utility, the applicable rates for each utility, and an applicable inflation factor. The UEL for a given funding period is the product of the utility rate multiplied by the payable consumption level multiplied by the inflation factor. The UEL is expressed in terms of Per Unit Month (PUM) costs. The utility rate for each type of utility will be the actual average rate from the most recent 12-month period that ended June 30th prior to the beginning of the applicable funding period. The rate will be calculated by dividing the actual utility cost by the actual utility consumption, with consideration for pass-through costs (e.g., state and local utility taxes, tariffs) for the time period specified in this paragraph.
During our testing of HUD forms 52722 and 52723 (Calculation of Operating Subsidy and Utilities Expense Level), it was determined that the PHA failed to correctly include sewer and water consumption in the 2021 UEL calculation for Project SC056000235. This omission was not detected prior to our audit, which indicates deficiencies in the PHA’s monitoring of the calculation of utilities expense level.
Amount of Questioned Costs:
None.
Context:
In testing the Authority’s Calculation of Operating Subsidy and Calculation of Utilities Expense Level, we noted that the calculation for the fiscal years ended June 30, 2021 omitted costs related to sewer consumption. The Authority’s procedures related to the monitoring of compliance with HUD regulatory requirements did not detect this prior to our audit.
Cause:
The Authority’s internal controls over the Low Rent Operating Subsidy and Utilities Expense Level calculation process that were in place lacked the necessary controls over monitoring of related HUD regulatory requirements.
Effect:
The Authority could be receiving subsidy amounts that are smaller than the Authority needs to operate on an annual basis. The Authority may not detect errors to the calculation of operating subsidy and utilities expense level in a timely manner.
Auditor’s Recommendation:
Implement procedures to monitor compliance with HUD regulatory requirements related to the Authority’s calculation of operating subsidy and utilities expense level. Management should implement some form of supervisory review process to ensure that operating subsidy and utilities expense level calculations are complete and accurate.
Grantee Response:
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.
ALN 14.871 – Housing Voucher Cluster – Reporting
Condition and Criteria:
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires the Data Collection Form to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Additionally, a nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements".
The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance), be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier.
Pursuant to the reporting requirements of 24 CFR, Part 5, Subpart H, entities receiving HUD financial assistance, must electronically submit audited financial and other information to the Real Estate Assessment Center ("REAC") no later than nine months after the Housing Authority's fiscal year end.
Amount of Questioned Costs:
None.
Context:
The fiscal year 2021 audit was not filed within nine months of fiscal year end due to prior management not completing their audit in a timely manner.
Cause:
Prior management's process for completing the audit was not adequate in filing the audit in a timely manner.
Effect:
The Housing Authority is not considered a low-risk auditee for fiscal year 2022 and must meet the 40% coverage rule for testing federal expenditures under the Uniform Guidance requirements.
Auditor’s Recommendation:
We recommend that the new management submit the annual financial statement audit and single audit, as applicable, in a timely manner and to ensure that the Data Collection Form is filed by the due date required in the Uniform Guidance
Grantee Response:
The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.