Finding 395879 (2022-007)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2024-05-05

Audit: 305506

Organization: County of Columbus (NC)

Auditor: Mauldin & Jenkins LLC

AI Summary

Core Issue: The County's Voucher Management System (VMS) reports for June 2021 and June 2022 did not match the Section 8 fund's equity balances, indicating accounting discrepancies.
Impacted Requirements: Public Housing Agencies must maintain accurate accounts and reconcile reports to ensure compliance with Annual Contribution Contracts.
Recommended Follow-Up: The County should review all inputs to the VMS report to ensure alignment with the trial balance and supporting documentation.

Finding Text

Low Income Housing Assistance Program (Section 8), Assistance Listing Number 14.871, U.S. Department of Housing and Urban Development. Criteria: Public Housing Agencies (PHAs) are required to maintain complete and accurate accounts. In addition, the Annual Contribution Contracts (ACCs) 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. Condition: We noted the County received a waiver to completing their annual report but did complete a Voucher Management System (VMS) report for June 2022 which did not agree to the County’s equity balances in the Section 8 fund. Upon further investigation, the VMS report for June 2021 also did not agree to the County’s equity balances in the Section 8 fund. Context/Cause: The County did not reconcile their June 2021 and June 2022 VMS reports to the trial balance for the Section 8 fund. The June 2021 equity balances on the VMS report did not agree to the trial balance for the Section 8 fund by $172,169 and the June 2022 equity balances on the VMS report did not agree to the trial balance for the Section 8 fund by $79,981. Effects: The reports were submitted incorrectly. The VMS report for June 2022 was subsequently amended to agree to the trial balance of the Section 8 fund. The VMS report for June 2021 could not be amended. Recommendation: We recommend that the County perform a review of all inputs into the VMS report to ensure the inputs properly align with the trial balance and other supporting documentation. Auditee’s Response: We concur with the findings.

Corrective Action Plan

Name of Contact Person: Lacie Jacobs, Finance Director Heather Woody, Deputy Finance Director Corrective Action Plan: Prior to fiscal year 2008-2009, and before the current HUD Director and Finance staff were hired, the HUD department at the federal level requested each location identify a reserve amount to cover one year’s administrative cost on their report. When Columbus County recorded this reserve amount, it was recorded as a liability on the balance sheet (Operating Reserve-Vouchers) and not in equity. When this change occurred, the staff quit reporting this amount on the VMS statements. Also, when the Finance office took over the responsibility of keeping up with the changes in restricted and unrestricted funds; interest, fraud recovery, returned HAP payments and any refunds were not being added back into the funds. Between these two issues, it caused a difference between our reported fund balance (equity) on our VMS statements and our actual fund balance in the accounting software. No error was identified in years prior. To fix the issue, we corrected the classification of the Reserve account on the balance sheet and incorporated it with our unrestricted fund balance. We also classified our restricted fund balance clearly on the balance sheet. Also, the finance office amended the restricted and unrestricted logs and corrected the VMS reports to match the updated logs going back to June 30, 2021. Going forward, the finance office and the HUD department will keep dual month 13 VMS worksheets and restricted and unrestricted logs that should tie to our accrual accounting system. Proposed Completion Date: June 30, 2022

Other Findings in this Audit

395878 2022-006

Significant Deficiency Repeat
395880 2022-008

Significant Deficiency
972320 2022-006

Significant Deficiency Repeat
972321 2022-007

Material Weakness
972322 2022-008

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
93.778	Medical Assistance Program	$1.97M
14.871	Section 8 Housing Choice Vouchers	$1.78M
93.558	Temporary Assistance for Needy Families	$678,138
93.563	Child Support Enforcement	$534,880
93.568	Low-Income Home Energy Assistance	$481,701
21.027	Coronavirus State and Local Fiscal Recovery Funds	$443,185
93.658	Foster Care_title IV-E	$365,713
10.557	Special Supplemental Nutrition Program for Women, Infants, and Children	$287,103
93.045	Special Programs for the Aging_title Iii, Part C_nutrition Services	$260,741
93.354	Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response	$190,368
20.509	Formula Grants for Rural Areas and Tribal Transit Program	$136,399
93.659	Adoption Assistance	$122,670
90.404	2018 Hava Election Security Grants	$101,917
14.228	Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii	$95,562
93.110	Maternal and Child Health Federal Consolidated Programs	$93,421
10.561	State Administrative Matching Grants for the Supplemental Nutrition Assistance Program	$92,769
93.596	Child Care Mandatory and Matching Funds of the Child Care and Development Fund	$82,190
93.044	Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers	$68,358
14.239	Home Investment Partnerships Program	$64,537
97.042	Emergency Management Performance Grants	$63,049
93.217	Family Planning_services	$58,082
20.600	State and Community Highway Safety	$56,174
93.043	Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services	$53,608
93.116	Project Grants and Cooperative Agreements for Tuberculosis Control Programs	$47,912
93.994	Maternal and Child Health Services Block Grant to the States	$42,559
93.053	Nutrition Services Incentive Program	$38,794
93.069	Public Health Emergency Preparedness	$37,141
93.991	Preventive Health and Health Services Block Grant	$34,851
93.667	Social Services Block Grant	$33,217
97.039	Hazard Mitigation Grant	$26,951
93.767	Children's Health Insurance Program	$22,735
93.674	John H. Chafee Foster Care Program for Successful Transition to Adulthood	$22,313
10.923	Emergency Watershed Protection Program	$20,894
93.268	Immunization Cooperative Agreements	$19,012
66.818	Brownfields Assessment and Cleanup Cooperative Agreements	$18,516
93.898	Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations	$11,400
93.052	National Family Caregiver Support, Title Iii, Part E	$10,660
93.645	Stephanie Tubbs Jones Child Welfare Services Program	$10,466
93.556	Promoting Safe and Stable Families	$7,053
20.106	Airport Improvement Program	$7,044
93.977	Preventive Health Services_sexually Transmitted Diseases Control Grants	$1,670
93.566	Refugee and Entrant Assistance_state Administered Programs	$28