Finding Text
Finding 2025-004: Allowable Activities Housing Choice Voucher – 14.871 Material Weakness/Noncompliance – Activities Allowed or Unallowed Criteria: In the Housing Choice Voucher program, accumulated administrative fees post fiscal year 2003 may only be used to support the Housing Choice Voucher program. Further, the transfers of HAP and associated administrative fees, even temporarily, to support another program or use are not allowed and could be considered a breach of the annual contributions contract. Condition: The Agency utilizes the Voucher program to pay expenses on behalf of both the Voucher and Management programs. All payments are allocated between the Housing Choice Voucher program and the Management program. The Management program had a decrease in its unrestricted net position of $6,211 during the fiscal year ending September 30, 2025 which left a deficit balance of $4,215. The Management program owed the Voucher program $5,537 at September 30, 2025 and no longer had enough funds to pay all of its liabilities. The interfund balance was not being reimbursed in full every month. Cause: The Agency was not adequately monitoring its financial condition. Effect or Potential Effect: The Housing Choice Voucher program funded the Management programs losses and related deficit. Further, the process of the Voucher program paying bills on behalf of the Management program creates a temporary loan which is not allowable. Recommendation: The Agency should review with HUD on how to handle this issue. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.