Finding 1106310 (2024-001)

2024-001 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Totals, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2024. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for HAP - Portability In, Unrestricted Net Position and Restricted Net Position when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.