Finding Text
2025-001 - Interprogram due to/due from Activities (Significant Deficiency) Low Rent Public Housing - 14.850 Criteria: According to PHA Accounting Brief #14, interprogram receivable and payable relationships should not be reported under accrual accounting simply from the result of a Housing Authority using a common checking or working capital account. Because of the basic nature of most Federal and State programs, resources from one program cannot be used to support the costs of another program. HUD views interprogram receivable and payable balances reported in a Housing Authority’s Federal programs as possible indicators of non‐compliance. Condition: The Housing Authority had interfund receivables and payables that had not been settled as of fiscal year ended June 30, 2025. Context: The Housing Authority reported a $98,534 interprogram receivable in the Low Rent Public Housing Program and a $98,534 interprogram payable in its combined blended component units as of fiscal year ended June 30, 2025. Cause: The Housing Authority was not effectively monitoring and managing the interfund program balances in order to ensure that programs were not paying for other programs’ expenses. Questioned Costs: None Effect: The use of receivables and payables related to interprogram transactions between the Housing Authority’s program have allowed some programs to have negative cash balances and payables to the Low Rent Public Housing Program. Recommendation: The Housing Authority should expand its controls over interprogram receivables and payables to ensure that all such balances are settled each month. Management's Response: As we were made aware of these issues, we immediately reviewed current internal controls and procedures and intend to more closely monitor interprogram balances. This would include a careful review of the general ledger and interprogram activity and the settling of related balances each month.