Finding 1221654 (2025-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-06-30

AI Summary

  • Core Issue: The Authority failed to submit the required unaudited financial report to HUD by the December 15, 2025 deadline, completing it instead on April 27, 2026.
  • Impacted Requirements: This delay violates the Uniform Financial Reporting Standards, which mandate timely submission of GAAP-based financial information.
  • Recommended Follow-Up: The Authority should improve internal controls and ensure all audit documentation is organized and submitted on time to avoid future delays.

Finding Text

2025-002 – REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.881 – Moving-to-Work Demonstration Program CRITERIA Financial Reports (OMB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. CONDITION The unaudited submission was required to be submitted to HUD by December 15, 2025, however, the submission was not completed until April 27, 2026. CAUSE The Authority’s internal control processes were not sufficient to ensure timely completion of the submission. EFFECT As a result of not submitting the unaudited FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority ensure all requested audit documentation is organized and provided to auditors timely to ensure a more efficient audit process and prevent future reporting delays. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Corrective Action Plan

We agree that Elm City Communities should have a control environment that allows the books to be closed and regulatory reports filed on a timely basis. In August 2025 we completed a conversion from Elite to Yardi. This caused us to take longer than normal for our year end close process. Planned Implementation Date of Corrective Action: Immediately Person Responsible for Corrective Action: Shenae Draughn, President.

Categories

HUD Housing Programs Internal Control / Segregation of Duties Subrecipient Monitoring Reporting Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.881 MOVING TO WORK DEMONSTRATION PROGRAM $116.72M
14.888 LEAD-BASED PAINT CAPITAL FUND PROGRAM $2.56M
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $467,386
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $317,348
14.892 CHOICE NEIGHBORHOODS PLANNING GRANTS $180,255
14.870 RESIDENT OPPORTUNITY AND SUPPORTIVE SERVICES - SERVICE COORDINATORS $121,528