Finding 394664 (2020-015)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2020
Accepted
2024-04-25

AI Summary

  • Core Issue: The Fayetteville Housing Authority misused $107,360.56 in federal funds intended for its own operations to cover costs for FHA Development, Inc.
  • Impacted Requirements: The Housing Authority must have a repayment plan for costs incurred on behalf of component units, which was not followed.
  • Recommended Follow-Up: The Housing Authority should ensure FHA Development, Inc. repays the $107,360.56 immediately to rectify the misappropriation.

Finding Text

2020-015 Misappropriation of Federal Funds - Improper Receivable Criteria: A Housing Authority is required to maintain a repayment plan with a component unit for any costs incurred by the Housing Authority on behalf of the component unit. Condition: The Fayetteville Housing Authority has an accounts receivable balance in the amount of $107,360.56 which represents costs incurred by the FHA Development, Inc. but paid by the Fayetteville Housing Authority. Questioned Costs: $107,360.56 Effect: Federal money received by the Fayetteville Housing Authority from the federal sources was misappropriated to subsidize the operations of the FHA Development, Inc.. Cause: Lack of oversight by Housing Authority management. Recommendation: We recommend that the Fayetteville Housing Authority requires the FHA Development, Inc. to immediately repay to the Fayetteville Housing Authority the $107,360.56 in federal money that was misappropriated.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Actions: Fayetteville Housing Authority provides affordable housing opportunities in Fayetteville, Arkansas and Northwest Arkansas. This service area has the most expensive housing market in the state with housing prices increasing faster than wages. COVID-19 has impacted many the ability of FHA Development, Inc. residents to make rental payments on time or in full. As a result, FHA Development, Inc. does not have the financial resources to repay the receivable funds in full and doing so would create a situation in which FHA Development, Inc could no longer operate and create a noticeable gap in affordable housing services in the organizations service area. FHA Development, Inc will repay the balance owed in monthly installments of $150 per month until the balance due is paid in full. Responsible Party: Audra Butler, Interim Deputy Director. Timeline: Repayment agreement approved by FHA Development Board of Directors 12/15/2021.

Categories

Questioned Costs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 394650 2020-001
    Material Weakness
  • 394651 2020-002
    Material Weakness
  • 394652 2020-003
    Material Weakness
  • 394653 2020-004
    Material Weakness
  • 394654 2020-005
    Material Weakness
  • 394655 2020-006
    Material Weakness
  • 394656 2020-007
    Material Weakness
  • 394657 2020-008
    Material Weakness
  • 394658 2020-009
    Material Weakness
  • 394659 2020-010
    Material Weakness
  • 394660 2020-011
    Material Weakness
  • 394661 2020-012
    Material Weakness
  • 394662 2020-013
    Material Weakness
  • 394663 2020-014
    Material Weakness
  • 394665 2020-016
    Material Weakness
  • 394666 2020-017
    Material Weakness
  • 394667 2020-018
    Material Weakness
  • 971092 2020-001
    Material Weakness
  • 971093 2020-002
    Material Weakness
  • 971094 2020-003
    Material Weakness
  • 971095 2020-004
    Material Weakness
  • 971096 2020-005
    Material Weakness
  • 971097 2020-006
    Material Weakness
  • 971098 2020-007
    Material Weakness
  • 971099 2020-008
    Material Weakness
  • 971100 2020-009
    Material Weakness
  • 971101 2020-010
    Material Weakness
  • 971102 2020-011
    Material Weakness
  • 971103 2020-012
    Material Weakness
  • 971104 2020-013
    Material Weakness
  • 971105 2020-014
    Material Weakness
  • 971106 2020-015
    Material Weakness
  • 971107 2020-016
    Material Weakness
  • 971108 2020-017
    Material Weakness
  • 971109 2020-018
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $2.89M
14.850 Public and Indian Housing $81,392
14.871 Section 8 Housing Choice Vouchers $20,347