Finding 1146134 (2024-002)

2024-002 ALN 14.871 – Housing Voucher Cluster – Activities Allowed or Unallowed Condition and Criteria: The Authority operates several distinct programs. Allocated expenses are paid from the Public and Indian housing funds and reimbursed using inter-program accounts. Reimbursement between programs was not made timely and has caused an increase in inter-program receivables and payables over time. Cash management is the process of managing the Authority to optimize its use of funds. This process involves the timing of receipts and disbursements to assure the availability of funds to meet expenditures and to maximize the yield from the investment of temporary surplus funds. The Authority incurred unallowable activities relating to the handling of inter-program balances between the various programs due to poor cash management controls. Amount of Questioned Costs: None Context: The Authority’s management failed to ensure inter-program advances were reimbursed properly and timely between its various federal and nonfederal programs. Programs with excessive inter-program balances include the Public Housing Operating Fund, Housing Choice Voucher, Revitalization of Severely Distressed Public Housing, Choice Neighborhoods Planning Grants, and COCC programs. Cause: The Authority has a lack of internal controls over cash management and has not been regularly monitoring and reconciling inter-program activities between their various federal and nonfederal programs. Effect: Various programs do not have sufficient unrestricted cash to satisfy inter-program balances. The lack of cash to cover inter-program imbalances can limit the liquidity and operational flexibility of the program. There is an increased risk of non-compliance with federal guidelines. Auditor’s Recommendation: We recommend that the Authority settle inter-program balances on a monthly basis and implement a process to review net cash balances during its budgetary procedures to reduce the risk of further noncompliance. Further, the Authority needs to implement stricter processes around inter-program balances to ensure the Authority can properly assess cash balances at a program level. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation.