Audit 6792

Section Eight Housing Choice Voucher Fund-CDFA #14.871-Allowable Costs/Cost Principals Finding 2023-001-Administrative Equity Deficit, and Related Large Interfund Payable Criteria and Condition At June 30, 2023, the Housing Choice Voucher (HCV) Fund owes the General Fund $68,877. Context The HCV Fund owes the Low Rent Program $68,877 at year-end. To simplify bookkeeping, often all overhead is often paid from the General Fund. But this should only be for a short period of time’s expenses, such as a month. When the interfund payable continues to increase, the risk increases that the owing fund may not be able to repay the money. If so, an interfund payable for all practicable purposes becomes a permanent transfer. HUD regulations do not allow permanent transfers between funds. Effect As noted above, the risk is increased that there is a permanent transfer of funds from the Low Rent program to Section Eight. Cause More overhead has been paid from the HCV Fund than the program can afford. Questioned Costs None Recommendation Management should carefully review the HCV overhead and make reductions where possible. Views of Responsible Officials and Planned Corrective Action I am Rhonda Kay, Executive Director and Designated Person to answer this finding. We continually monitor our expenses. However, we will carefully review them again, as the auditor recommends.

Section Eight Housing Choice Voucher Fund-CDFA #14.871-Allowable Costs/Cost Principals Finding 2023-001-Administrative Equity Deficit, and Related Large Interfund Payable Criteria and Condition At June 30, 2023, the Housing Choice Voucher (HCV) Fund owes the General Fund $68,877. Context The HCV Fund owes the Low Rent Program $68,877 at year-end. To simplify bookkeeping, often all overhead is often paid from the General Fund. But this should only be for a short period of time’s expenses, such as a month. When the interfund payable continues to increase, the risk increases that the owing fund may not be able to repay the money. If so, an interfund payable for all practicable purposes becomes a permanent transfer. HUD regulations do not allow permanent transfers between funds. Effect As noted above, the risk is increased that there is a permanent transfer of funds from the Low Rent program to Section Eight. Cause More overhead has been paid from the HCV Fund than the program can afford. Questioned Costs None Recommendation Management should carefully review the HCV overhead and make reductions where possible. Views of Responsible Officials and Planned Corrective Action I am Rhonda Kay, Executive Director and Designated Person to answer this finding. We continually monitor our expenses. However, we will carefully review them again, as the auditor recommends.