FAC Explorer

Audit 8295

FY End
2023-03-31
Total Expended
$107.32M
Findings
2
Programs
3
Organization: Harris County Housing Authority (MD)
Year: 2023 Accepted: 2023-12-22
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
6387 2023-001 Significant Deficiency - L
582829 2023-001 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $49.10M - 1
14.871 Section 8 Housing Choice Vouchers $1.61M Yes 0
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $334,024 - 0

Contacts

Name Title Type
LEXZEEFJUJY1 Melissa Quijano Auditee
7135782100 Mandy Merchant Auditor
No contacts on file

Notes to SEFA

Title: Sub-Recipients Accounting Policies: The schedule of expenditures of federal awards includes the federal grant activity of the Authority and its Blended Component Units and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Section 8 Housing Choice Voucher Program, ALN No. 14.871, to be considered an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the total expenditures paid by the Authority. HCHA Cypresswood Estates, LLC, which is a blended component unit, elected to have their own single audit and their expenditures of federal awards are therefore excluded from the Authority’s Schedule of Federal Awards. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10-percent de minimis indirect cost rate. During the year ended March 31, 2023, the Authority had no sub-recipients.
Title: Noncash Federal Assistance Accounting Policies: The schedule of expenditures of federal awards includes the federal grant activity of the Authority and its Blended Component Units and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Section 8 Housing Choice Voucher Program, ALN No. 14.871, to be considered an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the total expenditures paid by the Authority. HCHA Cypresswood Estates, LLC, which is a blended component unit, elected to have their own single audit and their expenditures of federal awards are therefore excluded from the Authority’s Schedule of Federal Awards. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10-percent de minimis indirect cost rate. The Authority did not receive any noncash federal assistance for the year ended March 31, 2023.
Title: Loan Programs Accounting Policies: The schedule of expenditures of federal awards includes the federal grant activity of the Authority and its Blended Component Units and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. In accordance with HUD regulations, HUD considers the Annual Budget Authority for the Section 8 Housing Choice Voucher Program, ALN No. 14.871, to be considered an expenditure for the purposes of this schedule. Therefore, the amount in this schedule is the total amount received directly from HUD and not the total expenditures paid by the Authority. HCHA Cypresswood Estates, LLC, which is a blended component unit, elected to have their own single audit and their expenditures of federal awards are therefore excluded from the Authority’s Schedule of Federal Awards. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10-percent de minimis indirect cost rate. In accordance with the Uniform Guidance, the notes to the Schedule of Expenditures of Federal Awards shall include loan and loan activities of federal programs. During the year ended March 31, 2023, the Authority obtained $30,301,827 in CDBG loans from Harris County, Texas. There were no repayments made during the fiscal year. The March 31, 2023 ending balance of outstanding CDBG loans was $49,102,739.

Finding Details

Finding 2023-001
Federal Agency: US Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/Entitlement Grants ALN Number: 14.228 Award Periods: April 1, 2022 – March 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance also reported as Other Noncompliance Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Controller General of the United States and the Internal Control Integrated Framework”, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). In addition, 2 CFR 200.502(b) states that since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Condition: The Authority’s schedule of expenditures of federal awards (SEFA) did not report loan balances on the SEFA as required by Uniform Guidance for federal program 14.228. Questioned costs: Not able to determine. Context: The Agency did not report loan balances on the SEFA. Cause: The Agency was not aware of the requirements to include loan balances on the SEFA. Effect: The SEFA omitted loan balances for federal program 14.228. Therefore, it was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a) and 200.502 (b). The Agency’s program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-001
Federal Agency: US Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/Entitlement Grants ALN Number: 14.228 Award Periods: April 1, 2022 – March 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance also reported as Other Noncompliance Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Controller General of the United States and the Internal Control Integrated Framework”, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). In addition, 2 CFR 200.502(b) states that since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Condition: The Authority’s schedule of expenditures of federal awards (SEFA) did not report loan balances on the SEFA as required by Uniform Guidance for federal program 14.228. Questioned costs: Not able to determine. Context: The Agency did not report loan balances on the SEFA. Cause: The Agency was not aware of the requirements to include loan balances on the SEFA. Effect: The SEFA omitted loan balances for federal program 14.228. Therefore, it was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a) and 200.502 (b). The Agency’s program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.