Finding Text
2025-003 Federal grants (Significant Deficiency) Assistance Listing No.: 14.238 Assistance Listing No.: 14.850 Agency: U.S. Department of Housing and Urban Development Condition and criteria: Public Housing Authorities (PHA) are required to have controls in place to ensure Management performs the procedures necessary to ensure that it requisitions, accounts for, and manages its federal grants properly, timely, and efficiently. This includes closing out its grants within a reasonable time after the grants have been fully expended, requisitioning grant funds in a timely and efficient manner, and executing proper cash disbursements control over grant expenditures. We noted the following regarding the Authority’s management of its federal grants: 1) The Authority did not close out several fully expended grants that related to older years as of June 30, 2025. 2) The Authority did not, in all instances, make timely requisitions from its operating and capital grants. Additionally, when requisitions were made, they were not always calculated in accordance with HUD guidelines. 3) We noted one payment to a vendor which was made without a supporting invoice. The payment was made based on oral authorization by the maintenance supervisor who asserted that the work was completed. We were able to tie the payment back to a contract which was signed and the payment agreed with the contract amount, however no invoice was ever obtained for this payment. Effect: Management and the Board were not in compliance with the requirements of the Uniform Guidance. This noncompliance could have resulted in (1) delays in the grant closing processes by HUD, (2) the Authority losing funding due to not properly requisitioning grants, and (3) the Authority making improper payments to vendors, among other possible oversights. Cause: Due to a change in management at the Authority and the training that was, and still is, required by management, the above oversights occurred during the year under audit. Questioned costs: None. Repeat finding: This is a repeat finding. Recommendation: We recommend that management of the Authority review its processes for managing its grants with HUD to ensure that, in the future, grant revenues and expenditures are properly handled going forward. Management’s response: The Authority has had some staff turnover over the past several years. A new executive director and a new account clerk have both been hired within the past several years. Management was aware of the issues noted above. Management plans to work with the newly hired fee accountant in the future to assist with these issues going forward.