Finding Text
CFDA No.: 14.850 Agency: U.S. Department of Housing and Urban Development Criteria: Public Housing Authorities (PHA) implementing asset management must develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)). Prior to the beginning of its fiscal year, a PHA is required to prepare an operating budget. The PHA’s Board of Commissioners is required to review and approve the budget by resolution. The approved Board resolution must be submitted to HUD (24 CFR section 990.315(a)). Condition: We noted that management of the Authority did not submit an operating budget by AMP location for the year ended June 30, 2024. Context: During our audit inquiries, we were informed that the Authority did not prepare an operating budget by AMP location for the year ended June 30, 2024. Effect: Management and the Board were not in compliance with the requirements of the Uniform Guidance. This noncompliance could have resulted in deficiencies in the Board’s monitoring related to revenues and expenses. Cause: Due to a change in management at the Authority, and due to a lack of training by the accounting personnel on accounting and the budgeting process, a budget by AMP location was not prepared for the year ended June 30, 2024. Questioned costs: None identifies. Repeat finding: This is a repeat finding. Recommendation: We recommend that management of the Authority work with its newly retained fee accountant to prepare an operating budget by AMP location. Management’s response: The Authority has had some staff turnover over the past several years. A new executive director and a new account clerk were both hired within the past several years. Management was aware that its budget was not prepare by AMP location. Management engaged the services of a fee-accountant subsequent to year-end who will assist with the budgeting process in the future. The fee engaged was just recently re-engaged subsequent to June 30, 2025 year end. Management is aware that general best practice is to have a budget adopted by the board prior to the beginning of each fiscal year, however since the fee accountant was retained after the beginning of the 2025-2026 fiscal year, the 2025-2026 budget will not be prepared and adopted by the board on a timely basis.