Finding 375666 (2023-008)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-12
Audit: 294738
Organization: City of Fairfield (CA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The City PHA failed to document its annual review and approval of the utility allowance schedule for fiscal year 2023.
  • Impacted Requirements: Non-compliance with 2 CFR 200.303 and 24 CFR section 982.517 regarding maintaining an up-to-date utility allowance schedule.
  • Recommended Follow-Up: Ensure adherence to internal policies by documenting the annual review process for the utility allowance schedule.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871 Pass-through: N/A Award No. and Year: CA065 - 2023 Compliance Requirement: Special Tests and Provisions – Utility Allowance Schedule Type of Finding: Instance of Non-Compliance and Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must 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. This includes internal controls over maintaining records of the review and approval of the utility allowance schedule. Per the 2023 Compliance Supplement, the public housing authority (PHA) must maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517). The PHA’s Housing Choice Voucher (HCV) Administrative Plan states that the PHA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule. Condition: We identified that management did not document their annual review and acceptance of the changes to the utility allowance schedules in effect during the fiscal year 2023. Management asserted that the revisions to the utility allowance schedule are not required to be submitted to the PHA board for approval; however, the HCV Administrative Plan does not delegate the authority to management to approve changes to the utility allowance schedule. Cause: The City PHA did not follow its policy to maintain information evidencing its review of revisions to the utility allowance schedule. Effect: The City did not comply with the utility allowance schedule requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The City utilized two utility allowance schedules in the fiscal year 2023. The rates were revised January 1, 2022, and January 1, 2023. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City follow its policy to maintain information supporting its annual review of the utility allowance schedule. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.

Corrective Action Plan

Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Voucher Cluster Federal Assistance Listing Number: 14.871 Pass‐through: N/A Award No. and Year: CA065‐2023 Compliance Requirement: Utility Allowance Schedule Type of Finding: Instance of Non‐Compliance and Material Weakness in Internal Control over Compliance Views of Responsible Officials: The Housing Authority fully complied with 24CFR 982.517(C)(1) of HUD regulations that states that "A PHA must review its schedule of utility allowances each year and must revise its allowance for a utility category if there has been a change of 10 percent or more in the utility rate since the last time the utility allowance schedule was revised. The PHA must maintain information supporting its annual review of utility allowances and any revisions made in its utility allowance schedule." Each year, the Housing Authority hires a consultant to analyze the Utility allowances for the Fairfield jurisdiction. Once that assessment is completed, Housing Authority staff and Management review it. The Housing Authority staff then meets with the Consultant to discuss any irregularities found or resolve questions emanating from its review. Once staff and Management are satisfied with the information, have clear documentation explaining the Consultant's conclusions, and memorialize any categories that have changed 10% or more, Management will finalize its review of the Utility Allowance Schedule. The Housing Authority will document Management’s approval of the utility allowance adjustments, if any. Responsible Individual(s): Tanya Tran, Housing Division Manager LaTanna Jones, Deputy Executive Director Anticipated Completion Date: June 1, 2024

Categories

HUD Housing Programs Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 375659 2023-004
    Material Weakness
  • 375660 2023-005
    Significant Deficiency
  • 375661 2023-005
    Significant Deficiency
  • 375662 2023-005
    Significant Deficiency
  • 375663 2023-005
    Significant Deficiency
  • 375664 2023-006
    Material Weakness
  • 375665 2023-007
    Significant Deficiency
  • 952101 2023-004
    Material Weakness
  • 952102 2023-005
    Significant Deficiency
  • 952103 2023-005
    Significant Deficiency
  • 952104 2023-005
    Significant Deficiency
  • 952105 2023-005
    Significant Deficiency
  • 952106 2023-006
    Material Weakness
  • 952107 2023-007
    Significant Deficiency
  • 952108 2023-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $10.22M
20.507 Federal Transit_formula Grants $1.52M
20.507 Covid-19 Federal Transit_formula Grants $1.03M
97.083 Staffing for Adequate Fire and Emergency Response (safer) $1.01M
20.205 Highway Planning and Construction $657,978
14.231 Covid-19 Emergency Solutions Grant Program $473,706
12.003 Community Economic Adjustment Assistance for Responding to Threats to the Resilience of A Military Installation (b) $411,585
14.218 Covid-19 Community Development Block Grants/entitlement Grants $359,474
14.218 Community Development Block Grants/entitlement Grants $346,177
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $215,000
14.239 Home Investment Partnerships Program $155,369
20.600 State and Community Highway Safety $142,546
97.044 Covid-19 Assistance to Firefighters Grant $71,483
16.738 Edward Byrne Memorial Justice Assistance Grant Program $5,715