Finding 393364 (2023-010)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-04-16

AI Summary

  • Core Issue: The Authority failed to accurately reconcile Housing Assistance Payments (HAP) and administrative equity, leading to a significant deficiency in internal controls.
  • Impacted Requirements: Compliance with accounting standards for Public Housing Authorities (PHAs) regarding proper maintenance and reporting of equity balances.
  • Recommended Follow-Up: The Authority should review and correct the equity roll forward process to ensure accurate reporting and compliance moving forward.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding:  Significant Deficiency in Internal Control over Compliance  Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected.(24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $517,497 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: No. Recommendation: We recommend the authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Housing Voucher Cluster – Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: Processes are being updated to include a monthly reconciliation of program equity to be performed by Finance staff in cooperation with Program staff. Finance staff are undergoing substantial training to improve both programmatic understanding and financial systems knowledge. Name(s) of the contact person(s) responsible for corrective action: Ellen Eudy, Deputy Director, Financial Operations and John Morrison, Controller Planned completion date for corrective action plan: Training in progress with reconciliation process to be completed by June 30, 2024.

Categories

Questioned Costs HUD Housing Programs Special Tests & Provisions Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 393344 2023-002
    Material Weakness Repeat
  • 393345 2023-002
    Material Weakness Repeat
  • 393346 2023-002
    Material Weakness Repeat
  • 393347 2023-003
    Material Weakness Repeat
  • 393348 2023-003
    Material Weakness Repeat
  • 393349 2023-003
    Material Weakness Repeat
  • 393350 2023-004
    Material Weakness Repeat
  • 393351 2023-004
    Material Weakness Repeat
  • 393352 2023-004
    Material Weakness Repeat
  • 393353 2023-005
    Material Weakness Repeat
  • 393354 2023-006
    Material Weakness
  • 393355 2023-007
    Significant Deficiency Repeat
  • 393356 2023-007
    Significant Deficiency Repeat
  • 393357 2023-007
    Significant Deficiency Repeat
  • 393358 2023-008
    Significant Deficiency
  • 393359 2023-008
    Significant Deficiency
  • 393360 2023-008
    Significant Deficiency
  • 393361 2023-009
    Significant Deficiency
  • 393362 2023-009
    Significant Deficiency
  • 393363 2023-009
    Significant Deficiency
  • 393365 2023-010
    Significant Deficiency
  • 393366 2023-010
    Significant Deficiency
  • 969786 2023-002
    Material Weakness Repeat
  • 969787 2023-002
    Material Weakness Repeat
  • 969788 2023-002
    Material Weakness Repeat
  • 969789 2023-003
    Material Weakness Repeat
  • 969790 2023-003
    Material Weakness Repeat
  • 969791 2023-003
    Material Weakness Repeat
  • 969792 2023-004
    Material Weakness Repeat
  • 969793 2023-004
    Material Weakness Repeat
  • 969794 2023-004
    Material Weakness Repeat
  • 969795 2023-005
    Material Weakness Repeat
  • 969796 2023-006
    Material Weakness
  • 969797 2023-007
    Significant Deficiency Repeat
  • 969798 2023-007
    Significant Deficiency Repeat
  • 969799 2023-007
    Significant Deficiency Repeat
  • 969800 2023-008
    Significant Deficiency
  • 969801 2023-008
    Significant Deficiency
  • 969802 2023-008
    Significant Deficiency
  • 969803 2023-009
    Significant Deficiency
  • 969804 2023-009
    Significant Deficiency
  • 969805 2023-009
    Significant Deficiency
  • 969806 2023-010
    Significant Deficiency
  • 969807 2023-010
    Significant Deficiency
  • 969808 2023-010
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $179.83M
14.195 Section 8 Housing Assistance Payments Program $158.19M
21.026 Homeowner Assistance Fund $122.54M
14.275 Housing Trust Fund $6.62M
14.239 Home Investment Partnerships Program $4.63M
14.871 Section 8 Housing Choice Vouchers $2.26M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $961,767
14.879 Mainstream Vouchers $285,184