2023-003 Special Tests and Provisions – Inter-Program Fund Management Public and Indian Housing Program – CFDA Number 14.850 Section 8 Housing Voucher Cluster (Section 8): Section 8 Housing Choice Vouchers Program – CFDA Number 14.871 Mainstream Vouchers – CFDA Number 14.879 Material Weakness in Int...
2023-003 Special Tests and Provisions – Inter-Program Fund Management Public and Indian Housing Program – CFDA Number 14.850 Section 8 Housing Voucher Cluster (Section 8): Section 8 Housing Choice Vouchers Program – CFDA Number 14.871 Mainstream Vouchers – CFDA Number 14.879 Material Weakness in Internal Control, Material Noncompliance Condition: There were inter-program borrowings using federal funds which are unauthorized distributions, resulting in $3,943,604 of the total $4,164,790 in inter-program "due from" and "due to" balances lacking supporting documentation or reconciliation schedules. The unsupported balances primarily consist of significant amounts due to the Public Housing program, including $1,590,789 due to AMP 2 and $2,200,000 due to AMP 199 HOPE VI. These are offset by significant amounts owed by the Housing Choice Voucher program ($1,458,947) and the Central Office Cost Center ($2,190,705). Auditor’s Recommendation: To strengthen internal controls and ensure compliance, it is recommended that the Authority perform a detailed analysis to identify and document the specific transactions comprising the outstanding inter-program balances. Based on this analysis, a formal plan should be developed to resolve and settle these balances. To prevent a recurrence, the Authority should also establish and implement written policies that outline clear requirements for proper authorization, documentation, and timely settlement of any future inter-program transactions. Specifically, the inter-program amounts should be settled every month and balances should not be carried forward. Finally, ongoing compliance can be ensured by incorporating a monthly reconciliation of all "due from" and "due to" accounts into the regular financial closing process. Action Taken: Management has begun a detailed analysis to fully reconcile all unsupported inter-program balances by April 30, 2026. Following this, a formal plan to settle the balances will be presented to the Board by May 31, 2026. To prevent a recurrence, a new Inter-Program Transfer Policy—requiring written authorization and clear documentation—is being drafted for Board approval by June 30, 2026. These new controls will be supported by mandatory monthly reconciliation procedures to ensure ongoing compliance, with all corrective actions to be fully implemented by July 31, 2026.