Finding Text
Finding 2022-006-Late Filing of Audit Report-Reporting and Special Tests Criteria and Specific Requirement HUD regulations require that the audit report be filed with REAC no later than 9 months after year end. This audit report was due to be filed no later than March 31, 2023. Condition Found This audit report is past-due. Cause The long-time Executive Director was in ill health as the deadline approached. This person left the position after the deadline passed. As noted elsewhere, current management signed a Cooperative Agreement dated November 14, 2023. We contacted both new management and the Authority’s fee accountant regarding the unaudited financial statements’ status. Both claimed that the accounting and related records were in disarray or missing, and they were working to finish the unaudited financial statements. The unaudited statements were posted on REAC’s website on October 9, 2025. We received a drop box from the fee accountant on November 4, 2025, which included much of the information we needed to perform the audit. Effect The board of commissioners, HUD, and other interested third parties did not receive timely financial information. In addition, since total awards expended on all federal programs exceeded $750,000 ($756,809), the audit must be done in accordance with the Single Audit Act which includes specific steps for the calculated “major program”, as outlined in the OMB Compliance Supplement. Low Rent is the calculated “major program.” The Compliance Supplement that covered audits with years beginning with years ended June 30, 2021, for the first time, required the auditor to perform specific detailed steps to test the calculation of the Low Rent performance operating subsidy. These steps include, but are not limited to, reviewing the numbers on Form 52722, the compilation of utility usage data, and the three- year rolling base. Due to passage of years, we are unable to test the PFS, as required by the Compliance Supplement. Recommendation to prevent future occurrences Current management is aware of the federal deadlines for the Authority. View of Responsible Officials We are aware of the filing deadlines.