Finding 1135449 (2023-007)

Material Weakness Repeat Finding
Requirement
H
Questioned Costs
-
Year
2023
Accepted
2025-05-01
Audit: 355249

AI Summary

  • Core Issue: The Authority failed to make timely and accurate requisitions for operating and capital grants, violating HUD guidelines.
  • Impacted Requirements: Compliance with HUD regulations regarding grant requisition practices was not met, risking the Authority's entitlement to full grant funding.
  • Recommended Follow-up: Management should collaborate with the new fee accountant to establish clear policies and training for proper grant requisition processes.

Finding Text

2023-007 Grant Requisitions (Material Weakness) CFDA No.: 14.872 and 14.850 Agency: U.S. Department of Housing and Urban Development Criteria: Public Housing Authorities (PHA) are required to implement project-based practices related to their operating subsidy and capital grant. This includes making proper and timely requisitions of funding from the grants. Condition: We noted that management of the Authority did not, in all instances, make timely requisitions from its operating and capital grants. Additionally, when requisitions were made, the amounts were not calculated in accordance with HUD guidelines. Context: During our audit, we noted that the amounts drawn down for the operating grant and the capital grant were calculated incorrectly. The calculation used was not in conformity with HUD regulations. Additionally, we noted that management did not make these requisitions in a timely manner. Effect: Management and the Board were not in compliance with the HUD regulations. This noncompliance could have resulted in the Authority not receiving that total amount of grant funding to which it was entitled. 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 grant requisition process, grant funding was neither properly nor timely requisitioned 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 better establish policies and procedures to ensure compliance with the grant requisition processes. 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 is evaluating its processes and procedures related to grant requisitions and is planning on implementing procedures to ensure grants are requisitioned in the future. Additionally, management is working with its newly hired fee accountant to ensure grant funds are properly requisitioned in the future.

Categories

HUD Housing Programs Material Weakness

Other Findings in this Audit

  • 559004 2023-004
    Significant Deficiency Repeat
  • 559005 2023-005
    Material Weakness Repeat
  • 559006 2023-006
    Significant Deficiency Repeat
  • 559007 2023-007
    Material Weakness Repeat
  • 559008 2023-005
    Material Weakness Repeat
  • 559009 2023-007
    Material Weakness Repeat
  • 1135446 2023-004
    Significant Deficiency Repeat
  • 1135447 2023-005
    Material Weakness Repeat
  • 1135448 2023-006
    Significant Deficiency Repeat
  • 1135450 2023-005
    Material Weakness Repeat
  • 1135451 2023-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $706,686
14.872 Public Housing Capital Fund $477,317
14.238 Shelter Plus Care $92,139