Finding 1100881 (2024-001)

Finding 2024-001 – HUD Financial Management Review Findings (Other Matter) Public Housing Program – CFDA No. 14.850a, Grant period – fiscal year ended June 30, 2024 Criteria The Code of Federal Regulations (CFR’s) and HUD PIH Notices and Handbooks provide requirements and guidance for which the Public Housing Program is to be administered and operated under. Condition and Perspective During March of 2024, HUD conducted a Financial Management Review of the Authority covering fiscal years 2017 through 2023. The Review Report dated June 28, 2024, included the following Review Findings: Finding #2024-01a: Potential Ineligible Use of Public Housing Funds – Interfund transactions with the Rosemont Place property of $824,432. Finding #2024-01b: Potential Ineligible Use of Public Housing Funds – Interfund transactions with the COCC, ROSS Program and Jobs Plus Program of $232,888. Finding #2024-02a: Potential Ineligible Use of Public Housing Funds – Interfund transactions with the Tiny Homes properties of $952,241. Finding #2024-02b: Equity Transaction - Tiny Homes properties transfer to Section 9 of $919,407 needs additional support. Finding #2024-04: Limitations of Scope of Review – FDS Reporting. Note that the HUD Review included a Concern (not a Review Finding) referenced with #2024-03, which is not applicable to this Finding. Questioned Costs – HUD’s Review Report cited potential ineligible uses of Program funds and an unsupported amount in its Review Report; outlined in Review Report Findings 2024-01a, 2024-01b, 2024-02a and 2024-02b above. Cause Potential failure to execute certain controls over eligible use requirements of the Program funds. Effect Potential noncompliance with eligible use (Allowability) requirements of the Program. Recommendation The Authority has responded to HUD’s Review Report Findings with specific corrective actions including opening and utilizing additional bank accounts to limit inter-program activity and provide additional clarity and transparency to transactions. We recommend that the Authority continue executing its corrective actions. Additionally, we recommend that the Authority continue working with HUD’s Quality Assurance Team (QAT) to implement any additional recommendations HUD may have. Management’s Response The Authority has responded to HUD’s Review Report Findings with specific corrective actions including opening and utilizing additional bank accounts to limit inter-program activity and provide additional clarity and transparency to transactions. The Authority will continue executing its corrective actions. Additionally, the Authority will continue working with HUD’s Quality Assurance Team (QAT) to implement any additional recommendations HUD may have. The Authority’s Executive Director, Africa Porter has assumed the responsibility of executing the corrective actions and any additional recommendations HUD may have and anticipates resolution as of June 30, 2025.