Finding 32037 (2022-007)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-05-29
Audit: 37231
Organization: City of Ashland (KY)

AI Summary

  • Core Issue: Overpayments totaling approximately $4,000 were made to tenants and landlords due to incorrect effective dates entered during the recertification process.
  • Impacted Requirements: Compliance with 2 CFR Part 200, Subpart E, which mandates that costs charged to grant programs must be accurately identified with specific cost objectives.
  • Recommended Follow-Up: Recoup overpayments and implement supervisory reviews for all recertifications, along with regular reviews of the monthly Reconciliation Report to ensure accuracy.

Finding Text

2022-007 FEDERAL COMPLIANCE - OVERPAYMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: 2 CFR Part 200, Subpart E requires direct costs charged to grant programs be specifically identified with a particular cost objective. Condition: We noted overpayments to tenants and landlords totaling approximately $4,000 during FY22 with the errors carrying over to payments made during FY23. Cause: Through discussions with PHA management, it appears that these errors were due to incorrect effective dates being entered on form HUD-50058 during the recertification process. Currently, only new admissions are being subject to a supervisory review, while one is not being performed on interim and annual recertifications. Additionally, a Reconciliation Report is generated as part of the monthly check generation process that shows all changes that have been made to tenant information during the month. This report is not currently being reviewed. Effect and Questioned Costs: Incorrect amounts were paid to landlords and tenants. Repeat Finding: No Recommendation: We recommend that these overpayments be recouped from the landlords and tenants. Additionally, to prevent errors in the future, we recommend a supervisory review be performed on all interim and annual recertifications. Additionally, the ?Reconciliation Report? that is generated as part of the monthly check generation process should be reviewed to ensure all changes for the month are correct. Management?s Response: Each staff member has received training and has knowledge that effective dates for annual re-exams are to be for the 1st of the month Administrator is currently auditing all new admissions and random annual and interim reexaminations. Any errors found in this process are being corrected by caseworkers with Administrators help. Reconciliation report will be reviewed since audit. Funds have been recouped.

Corrective Action Plan

Each staff member has received training and has knowledge that effective dates for annual re-exams are to be for the 1st of the month Administrator is currently auditing all new admissions and random annual and interim reexaminations. Any errors found in this process are being corrected by caseworkers with Administrators help. Reconciliation report will be reviewed since audit. Funds have been recouped.

Categories

Questioned Costs HUD Housing Programs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 32031 2022-001
    Material Weakness
  • 32032 2022-002
    Material Weakness
  • 32033 2022-003
    Material Weakness
  • 32034 2022-004
    Material Weakness
  • 32035 2022-005
    Material Weakness
  • 32036 2022-006
    Material Weakness
  • 32038 2022-008
    Material Weakness
  • 608473 2022-001
    Material Weakness
  • 608474 2022-002
    Material Weakness
  • 608475 2022-003
    Material Weakness
  • 608476 2022-004
    Material Weakness
  • 608477 2022-005
    Material Weakness
  • 608478 2022-006
    Material Weakness
  • 608479 2022-007
    Material Weakness
  • 608480 2022-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $3.54M
20.507 Federal Transit_formula Grants $974,424
14.218 Community Development Block Grants/entitlement Grants $315,263
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $59,522
95.001 High Intensity Drug Trafficking Areas Program $48,379
20.616 National Priority Safety Programs $520