Finding 1140589 (2024-002)

(2024-002) Reporting Criteria - The Uniform Financial Reporting Standards (24 CFR Section 5.801) related to both the Public Housing Operating Fund (14.850) and Section 8 Housing Choice Vouchers Program (14.871) require Public Housing Authorities to submit timely GAAP-based unaudited financial information to HUD annually, no later than 60 days after the end of the fiscal year of the reporting period, and as otherwise provided by law (see also 24 CFR 903.33). Condition - The Authority failed to submit its unaudited Financial Data Schedule (FDS) to HUD by the prescribed due date. Cause - The delay in submission was primarily attributed to an oversight in the fee accountant and financial department's year-end closeout processes. Additionally, there was a lack of adequate monitoring and reminder systems for critical HUD reporting deadlines. Effect - The late submission of the unaudited FDS resulted in non-compliance with HUD's reporting requirements, potentially affecting Authority’s future funding allocations and its reputation with HUD. Questioned Costs - None identified. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Recommendation - We recommend that the Authority consider the following correct actions: 1) Review and strengthen internal controls related to the financial reporting process, ensuring all critical deadlines are met. 2) Provide additional training for finance department staff on HUD reporting requirements and the importance of adhering to submission deadlines. 3) Develop and implement a comprehensive monitoring system that alerts staff of upcoming HUD reporting deadlines well in advance. 4) Conduct a thorough review of the year-end closeout processes to identify and rectify inefficiencies that may lead to delays in financial reporting. Management’s Response - (d) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action. (e) Action taken - The Authority will strengthen internal controls and training of staff to ensure reporting deadlines. The Authority has also engaged a new fee accountant to assist with the year-end closing procedures. (f) Planned Implementation Date - The Authority expects to complete the corrective action by September 30, 2025, at the time of its next required unaudited submission.