FAC Explorer

Audit 7237

FY End
2023-03-31
Total Expended
$7.03M
Findings
6
Programs
6
Organization: Housing Authority of the City of Lumberton (NC)
Year: 2023 Accepted: 2023-12-18
Auditor: Patterson & Associates PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
5480 2023-001 - Yes N
5481 2023-002 - - N
5482 2023-003 - - N
581922 2023-001 - Yes N
581923 2023-002 - - N
581924 2023-003 - - N

Programs

ALN Program Spent Major Findings
14.850 Public and Indian Housing $2.45M Yes 1
14.871 Section 8 Housing Choice Vouchers $2.31M Yes 2
14.872 Public Housing Capital Fund $1.16M Yes 0
14.269 Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (cdbg-Dr) $1.02M - 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $74,523 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $2,952 - 0

Contacts

Name Title Type
KNQRZLMV4YY1 Adrian Lowery Auditee
9106718200 Lauralynnbailey Auditor
No contacts on file

Notes to SEFA

Title: Note A - Basis of Presentation Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the organization under programs of the federal government for the year ended March 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the organization De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the organization under programs of the federal government for the year ended March 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the organization.
Title: Note B - Summary of Significant Accounting Policies Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the organization under programs of the federal government for the year ended March 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the organization De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and/or OMB Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note C - Indirect Cost Rate Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the organization under programs of the federal government for the year ended March 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the organization De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note D - Loans Outstanding Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the organization under programs of the federal government for the year ended March 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the organization De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Authority has no loans outstanding with compliance requirements at year end.

Finding Details

Finding 2023-001
Statement of Condition – For the Low Rent Public Housing, we reviewed 40 tenant files (recertification files and new tenant files) for fiscal year ended March 31, 2023. We reviewed 16 files for tenants who moved out during the fiscal year ended March 31, 2023. The selected files represented a sample of all files in the three AMPS. We noted 1 instance in which social security income was incorrectly calculated in determining total tenant income. Criteria – Per the Public Housing Occupancy Guidebook (Section 3.9), “The gross amount of social security benefit income, prior to Medicare or other deductions, must be counted as income…”. Effect – For the file referenced above, net social security benefits were included in the calculation. As a result, total annual income was understated and medical allowance deduction was understated. Because the tenant was paying flat rent, the net effect of this error was $0 per month. Cause – Incorrect procedures were followed in regards to calculating total tenant income. Identification of a repeat finding – This is a repeat finding from the immediate previous audit, 2022-003. Recommendation – Procedures surrounding tenant rent calculation processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 78.
Finding 2023-002
Statement of Condition – For the Housing Choice Voucher Program, we reviewed the budget for spending authorizations. During this review, it was discovered that the Authority had not budgeted for $1,578 in program expenditures for the year ended March 31, 2023. This resulted in unfavorable budget variances within the program. Criteria – HUD states that the Authority must budget appropriately for all expenditures. Effect – This violation resulted in an overspending. Cause – The Authority did not follow proper budgeting procedures. Recommendation – The Authority should review budget versus actual expenditures on a regular basis and should amend the budget as spending needs arise. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Budget amendments will be adopted prior to making expenditures that exceed budgeted amounts. Please refer to the corrective action plan on page 78.
Finding 2023-003
Statement of Condition – For the Housing Choice Voucher Program, we reviewed 40 files (recertification files and new files) for fiscal year ended March 31, 2023. We reviewed 6 files for tenants who moved out during the fiscal year ended March 31, 2023. In 1 instance, we noted that the utility allowance was calculated incorrectly. Criteria – Per the Housing Choice Voucher Program Guidebook (Utility Allowances), “When calculating the utility allowance for a family, the PHA must use the lower of the unit size leased or the family’s voucher size determined under the PHA’s subsidy standards...” Effect – For the instance noted above, the Authority used an incorrect unit size in calculating the utility allowance. As a result, the monthly housing assistance payment was overstated by $84. Cause – Incorrect procedures were followed in regards to family income calculations. Recommendation – Procedures surrounding family income recertification processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 78.
Finding 2023-001
Statement of Condition – For the Low Rent Public Housing, we reviewed 40 tenant files (recertification files and new tenant files) for fiscal year ended March 31, 2023. We reviewed 16 files for tenants who moved out during the fiscal year ended March 31, 2023. The selected files represented a sample of all files in the three AMPS. We noted 1 instance in which social security income was incorrectly calculated in determining total tenant income. Criteria – Per the Public Housing Occupancy Guidebook (Section 3.9), “The gross amount of social security benefit income, prior to Medicare or other deductions, must be counted as income…”. Effect – For the file referenced above, net social security benefits were included in the calculation. As a result, total annual income was understated and medical allowance deduction was understated. Because the tenant was paying flat rent, the net effect of this error was $0 per month. Cause – Incorrect procedures were followed in regards to calculating total tenant income. Identification of a repeat finding – This is a repeat finding from the immediate previous audit, 2022-003. Recommendation – Procedures surrounding tenant rent calculation processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 78.
Finding 2023-002
Statement of Condition – For the Housing Choice Voucher Program, we reviewed the budget for spending authorizations. During this review, it was discovered that the Authority had not budgeted for $1,578 in program expenditures for the year ended March 31, 2023. This resulted in unfavorable budget variances within the program. Criteria – HUD states that the Authority must budget appropriately for all expenditures. Effect – This violation resulted in an overspending. Cause – The Authority did not follow proper budgeting procedures. Recommendation – The Authority should review budget versus actual expenditures on a regular basis and should amend the budget as spending needs arise. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Budget amendments will be adopted prior to making expenditures that exceed budgeted amounts. Please refer to the corrective action plan on page 78.
Finding 2023-003
Statement of Condition – For the Housing Choice Voucher Program, we reviewed 40 files (recertification files and new files) for fiscal year ended March 31, 2023. We reviewed 6 files for tenants who moved out during the fiscal year ended March 31, 2023. In 1 instance, we noted that the utility allowance was calculated incorrectly. Criteria – Per the Housing Choice Voucher Program Guidebook (Utility Allowances), “When calculating the utility allowance for a family, the PHA must use the lower of the unit size leased or the family’s voucher size determined under the PHA’s subsidy standards...” Effect – For the instance noted above, the Authority used an incorrect unit size in calculating the utility allowance. As a result, the monthly housing assistance payment was overstated by $84. Cause – Incorrect procedures were followed in regards to family income calculations. Recommendation – Procedures surrounding family income recertification processes should be strengthened. Views of responsible officials and planned corrective actions – The Authority agrees with this finding. Please refer to the corrective action plan on page 78.