FAC Explorer

Finding 37118 (2022-007)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-26
Audit: 28069
Organization: Housing Authority of the City of Waterbury (CT)
Auditor: Marcum LLP

AI Summary

  • Core Issue: The Authority used Capital Funds for operating costs before the required voucher request date.
  • Impacted Requirements: Funds must be included in the approved CFP 5-Year Action Plan and obligated only after budget approval.
  • Recommended Follow-Up: Ensure future fund obligations occur after the voucher request date to comply with regulations.

Finding Text

2022-007 ? SPECIAL TESTS AND PROVISIONS ? CAPITAL FUNDS FOR OPERATING COSTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.872 ? Public Housing Capital Fund CRITERIA A PHA may use Capital Funds for operating costs only if it is included in the CFP 5-Year Action Plan that is approved by the PHA Board of Commissioners and HUD, and limited as described in paragraphs (l)(1) and (2) of this section. Capital Funds identified in the CFP 5-Year Action Plan to be transferred to operations are obligated once the funds have been budgeted and drawn down by the PHA. Once such transfer of funds occurs, the PHA must follow the requirements of 24 CFR part 990 with respect to those funds. CONDITION The Authority had obligated capital funds related to operations (BLI 1406) prior to voucher request date for these draws. CAUSE Management was unaware of this requirement. EFFECT The Authority had obligated funds for operations prior to the voucher request date of these draws. QUESTIONED COSTS None Identified. CONTEXT The Authority had three open capital fund grants during fiscal year 2022 (Capital Fund years 2020-2022). The Authority drew down funds for operating costs under capital fund years 2020 and 2021. Total capital fund draws for operating costs under these two grants during 2022 aggregated $1,061,999. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should obligate the funds in LOCCS after the date of the voucher request. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Corrective Action Plan

2022-007 Special Tests and Provisions ? Capital Funds for Operating Costs Significant Deficiency / Other Matter Historically, the Housing Authority obligated funds as they became available on a monthly basis, based on the five-year plan approved by HUD. The Housing Authority was not aware that draw downs of Capital funds for operating costs have to be obligated when the expense is incurred, or a contract entered into. The Comptroller, Jennifer Yager, will oversee this under the guidance of the CFO Consultant and the Capital Project Manager. The Housing Authority will put a process in place to make sure the operating funds are obligated in LOCCs only after a contract is executed and expenses have been incurred. This will be implemented in April 2023. Jennifer can be reached at 203-596-2640.

Categories

HUD Housing Programs Significant Deficiency Special Tests & Provisions

Other Findings in this Audit

  • 37119 2022-003
    Significant Deficiency
  • 37120 2022-004
    Material Weakness
  • 37121 2022-005
    Significant Deficiency
  • 37122 2022-006
    Material Weakness
  • 37123 2022-002
    Material Weakness
  • 37124 2022-003
    Significant Deficiency
  • 37125 2022-004
    Material Weakness
  • 37126 2022-005
    Significant Deficiency
  • 37127 2022-006
    Material Weakness
  • 37128 2022-002
    Material Weakness
  • 37129 2022-004
    Material Weakness
  • 37130 2022-004
    Material Weakness
  • 613560 2022-007
    Significant Deficiency
  • 613561 2022-003
    Significant Deficiency
  • 613562 2022-004
    Material Weakness
  • 613563 2022-005
    Significant Deficiency
  • 613564 2022-006
    Material Weakness
  • 613565 2022-002
    Material Weakness
  • 613566 2022-003
    Significant Deficiency
  • 613567 2022-004
    Material Weakness
  • 613568 2022-005
    Significant Deficiency
  • 613569 2022-006
    Material Weakness
  • 613570 2022-002
    Material Weakness
  • 613571 2022-004
    Material Weakness
  • 613572 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $3.02M
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $1.42M
14.850 Public and Indian Housing $466,976
14.871 Section 8 Housing Choice Vouchers $319,577
14.879 Mainstream Vouchers $173,889
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $44,546