Finding Text
Condition - The Municipality did not submit the required Financial Reports to the US Housing and Urban Development for the fiscal year ending June 30, 2021 during the required period. Criteria - As required by The U.S. Department of Housing and Urban Development (HUD) created the Real Estate Assessment Center (PIH-REAC) to centralize and standardize the way HUD monitors and evaluates HUD developments and programs. Each Public Housing Agencies is responsible for submitting financial information to PIH-REAC/HUD for analysis. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited financial information electronically to the Housing and Urban Development Agency (HUD). The FASSPH system is one of HUD’s main monitoring and oversight systems for the program.
Also, on Section (c) (1) the financial information to be submitted to HUD in accordance with paragraph (b) of this section, must be submitted to HUD annually, no later than 60 days after the end of the fiscal year of the reporting period, and as otherwise provided by law. In addition, on Section (d) (1) states that unaudited financial statements will be required 60 days after the PHA”s fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA’s fiscal year end, in accordance with the Single Audit Act and 2 CFR Part 200, Subpart F. Cause - The Municipality was affected by the COVID-19 pandemic and faced problems transmitting the financial reports. Also, the failure to have and maintain adequate accounting system, modified as required to obtain and prepare financial statements under the modified accrual basis and in accordance with GAAP, does not allow the Municipality to have timely, the submission of required reports. Effect - The lack of proper filing of required reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. Recommendation - The Federal Awards Department should strengthen control procedures to assure that financial reports of the federal awards are prepared and send to awarding agencies. Once reports are prepared, the Federal Awards Department should trace the amounts reported to accounting records that support the schedule of expenditures of Federal awards and verify agreement, accuracy and completeness of the reports and that they agree with the accounting records.