Finding Text
Real Property (Significant Deficiency ? Real Property Disposition) Condition: During testing of compliance over real property, we noted the City does not have a complete listing of real property either purchased with federal funds or managed under a federal program to assist with the primary objectives of providing housing to low-income residents. We also noted the City erroneously disposed of real property with an address of 294 Rhode Island Avenue, Woonsocket, RI, owned by the U.S. Department of Housing and Urban Development, which was intended to provide housing to low-income residents of the City of Woonsocket. Criteria: ? 24 CFR 570.505 Use of Real Property (24 CFR 570.502(a)(5) ? 24 CFR 570.201(b) Basic Eligible Activities - Disposition ? Uniform Guidance 2 CFR 200.303 Internal Controls states: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: ? Insufficient and ineffective internal controls in place over real property dispositions. ? Real property records were not maintained in a way that the City can identify properties either owned or managed under the HUD Federal award programs. Effect: ? Improper recording and use of program income received from sale of real property. ? Improper reporting to HUD regarding changes in use of real property. ? Noncompliance with program requirements relating to primary objectives of providing lowincome housing. ? Failure to maintain real property records leading to inability to properly track properties owned or managed under Federal award programs. ? Possible displacement of low-income residents (ineligible activities). Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend the City implement a system to ensure all Federal award program activities are tracked and program funds including program income, are used in accordance with all program requirements. We also recommend that the City maintain a list of properties either owned or maintained under federal award programs and supporting documentation for each property as required by Uniform Guidance and HUD regulations. We further recommend that a risk assessment be performed over Federal programs and implement additional controls to address identified risks. Oversight by another department may assist the City to mitigate risk associated with the recent turnover in the Planning and Development Department.