FAC Explorer

Finding 1216540 (2025-004)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-06-04
Audit: 403039
Organization: Ppep Microbusiness and Housing Development Corporation (AZ)
Auditor: ADDINGTON & ASSOCIATES PLLC

AI Summary

  • Answer: PMHDC believes it has met the award's goals by creating housing for farmworkers.
  • Trend: The organization claims that the lack of written approval was an oversight, not a violation.
  • List: Follow up on the Department of Labor's enforcement practices and assess potential cost disallowances.

Finding Text

PMHDC contends that it has substantially complied with the purpose of the award and has successfully developed permanent and temporary farm labor rental housing to meet the dire needs of migrant and seasonal farmworkers. The Organization is of the belief that the lack of prior written approval was an administrative oversight, not previously enforced by the Department of Labor, and PMHDC, therefore, vigorously defends its position that no costs should be disallowed.

Corrective Action Plan

The two residential properties purchased by PMHDC were the 42nd and 43rd properties purchased using funds from this award, which has been in place since 2012. The properties were included in the funding source approved Budget Narrative and Scope of Work. The requests for reimbursement were submitted for payment to the Department of Labor and subsequently processed and paid to the organization, without having submitted pre-acquisition documentation. The Federal Project Officer assigned to this award had previously visited the sites of the prior properties purchased on several occasions. Closeout reports required at the end of each funding cycle were submitted and subsequently approved by the funding source. At no time was a prior-approval package required to be submitted on any of the properties previously purchased.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1216537 2025-003
    Material Weakness Repeat
  • 1216538 2025-004
    Material Weakness Repeat
  • 1216539 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.415 RURAL RENTAL HOUSING LOANS $927,312
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $895,965
10.767 INTERMEDIARY RELENDING PROGRAM $625,581
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $129,812
59.046 MICROLOAN PROGRAM $113,822
17.264 NATIONAL FARMWORKER JOBS PROGRAM $80,082
10.870 RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM $39,990
10.U01 USDA-INTEREST SUBSIDY $12,436