Finding 392264 (2022-007)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2024-04-03
Audit: 302533
Organization: Municipality of Juana Diaz (PR)

AI Summary

  • Core Issue: The program failed to meet financial and reporting requirements, including late and missing submissions of the Form HUD-50058 and financial statements.
  • Impacted Requirements: Compliance with HUD regulations for timely submission of reports and maintenance of accurate records is critical for funding and audit purposes.
  • Recommended Follow-Up: Strengthen internal controls and procedures to ensure timely submission of required reports to HUD and adhere to financial reporting deadlines.

Finding Text

FINDING NUMBER 2022-007 FEDERAL PROGRAM HOUSING VOUCHER CLUSTER: SECTION 8 HOUSING CHOICE VOUCHERS/ COVID-19 SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS (ASSISTANCE LISTING NUMBERS 14.871/ 14.HCC/ 14.EHV) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIIREMENT REPORTING CONDITION The Program did not complied with the financial and special reporting requirements, as follows: 1. I performed a special reporting test over fifteen (15) participants' files and found the following situations:  In two (2) cases, I did not find evidence of the submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577-0083), corresponding to the reexamination audited.  In one (1) case, the Form HUD-50058, Family Report (OMB No. 2577- 0083) was submitted to HUD 240 days after its effective date. 2. I noted that GAAP-based unaudited and audited financial information for the fiscal year ended June 30, 2022, were not submitted in time. CRITERIA Code of Federal Regulations 24, part 908.104 (c), electronic transmission of data, states that electronic transmission of data consists of submission of all required data fields (correctly formatted) from the forms HUD-050058 and HUD-50058-FSS telephonically, in accordance with HUD instructions. Regardless of whether an HA obtains the ADP system itself or contracts with a service bureau to provide the system, the software must be periodically updated to incorporate changes or revisions in legislation, regulations, handbooks, notices, or HUD electronic transmission data format requirements. Also, CFR 24 982.158 (a), states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive. In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. CAUSE The internal controls and procedures maintained by the Program failed to ensure the timely submission to HUD of the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the GAAP based unaudited and audited financial information. EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the report to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively. RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the Form HUD-50058, Family Report (OMB No. 2577- 0083) and the financial reports according to applicable requirements. QUESTIONED COSTS None PRIOR YEAR FINDING This finding was presented in prior year Schedule of Findings and Questioned Costs (2021-004). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Instructions were given to the Program staff to strengthening existing internal controls and procedures to ensure the submission of the Form HUD-50058, Family Report (OMB No. 2577-0083), and the financial reports according to applicable requirements. The audited financial data schedule for the fiscal year 2021-2022 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.

Categories

HUD Housing Programs Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392260 2022-005
    Material Weakness
  • 392261 2022-006
    Material Weakness
  • 392262 2022-006
    Material Weakness
  • 392263 2022-007
    Material Weakness Repeat
  • 392265 2022-007
    Material Weakness Repeat
  • 392266 2022-008
    Material Weakness
  • 392267 2022-009
    Material Weakness
  • 392268 2022-009
    Material Weakness
  • 968702 2022-005
    Material Weakness
  • 968703 2022-006
    Material Weakness
  • 968704 2022-006
    Material Weakness
  • 968705 2022-007
    Material Weakness Repeat
  • 968706 2022-007
    Material Weakness Repeat
  • 968707 2022-007
    Material Weakness Repeat
  • 968708 2022-008
    Material Weakness
  • 968709 2022-009
    Material Weakness
  • 968710 2022-009
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
97.030 Community Disaster Loans $2.61M
93.356 Head Start Disaster Recovery $1.38M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.21M
14.218 Community Development Block Grants/entitlement Grants $461,967
21.019 Coronavirus Relief Fund $353,054
10.558 Child and Adult Care Food Program $105,205
93.600 Head Start $96,463
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $66,155
14.871 Section 8 Housing Choice Vouchers $45,360
14.241 Housing Opportunities for Persons with Aids $37,317
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $36,115
21.027 Coronavirus State and Local Fiscal Recovery Funds $26,400
14.896 Family Self-Sufficiency Program $24,680