Finding Text
2023-006 Project-Based Budgeting and Accounting (Significant Deficiency)
CFDA No.: 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) implementing asset management must develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)). Prior to the beginning of its fiscal year, a PHA is required to prepare an operating budget. The PHA’s Board of Commissioners is required to review and approve the budget by resolution. The approved Board resolution must be submitted to HUD (24 CFR section 990.315(a)).
Condition: We noted that management of the Authority did not submit an operating budget by AMP location for the year ended June 30, 2023.
Context: During our audit inquiries, we were informed that the Authority did not prepare an operating budget by AMP location for the year ended June 30, 2023.
Effect: Management and the Board were not in compliance with the requirements of the Uniform Guidance. This noncompliance could have resulted in deficiencies in the Board’s monitoring related to revenues and expenses.
Cause: Due to a change in management at the Authority, and due to a lack of training by the accounting personnel on accounting and the budgeting process, a budget by AMP location was not prepared for the year ended June 30, 2023.
Questioned costs: None identifies.
Repeat finding: This is a repeat finding.
Recommendation: We recommend that management of the Authority work with its newly retained fee accountant to prepare an operating budget by AMP location.
Management’s response: The Authority has had some staff turnover over the past several years. A new executive director and a new account clerk were both hired within the past several years. Management was aware that its budget was not prepare by AMP location. Management engaged the services of a fee-accountant subsequent to year-end who will assist with the budgeting process starting in the 2024-2025 fiscal year.