Finding 37127 (2022-006)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-26
Audit: 28069
Auditor: Marcum LLP

AI Summary

  • Core Issue: The Authority's inter-program accounts were out of balance by $5,105,852 due to a software issue, risking improper use of Housing Choice Voucher (HCV) funds.
  • Impacted Requirements: HAP funds cannot be used for administrative expenses or transferred to other programs, as per HUD regulations.
  • Recommended Follow-Up: Collaborate with the software provider to resolve the reconciliation issue and ensure HCV funds are not misallocated.

Finding Text

2022-006 ? SPECIAL TESTS AND PROVISIONS ? OPERATING TRANSFERS & ADMINISTRATIVE FEES Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.871 / 14.879 ? Housing Voucher Cluster CRITERIA The ACC establishes the amounts HUD will provide a PHA for HAP and administrative fees. With the exception of Moving to Work Housing Authorities, HAP may not be used to cover administrative expenses nor may HAP (including RNP) be loaned, advanced, or transferred to other component units or other programs such as Public and Indian Housing (Assistance Listing 14.850) (24 CFR sections 982.151 and 982.152). CONDITION The Authority?s inter-program accounts did not properly net to zero and were out of balance by $5,105,852 with the corresponding variance classified as cash. CAUSE Due to a software issue, the Authority?s inter-program accounts were out of balance and not properly reconciled. EFFECT As a result of the missing control related to the timely reconciliation of inter-program accounts, HCV administrative fee funding could have been loaned, advanced, or transferred to other programs. QUESTIONED COSTS None Identified. CONTEXT The has two bank accounts for which regular payments are made from (one for landlord payments and the other for operating expenses). Expenses are allocated to the programs through the use of inter-program accounts. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should work with the software provider to correct this issue and verify that the federal programs funding was not used for other programs. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Categories

HUD Housing Programs Special Tests & Provisions Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 37118 2022-007
    Significant Deficiency
  • 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
  • 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