Finding 395919 (2023-003)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-05-06
Audit: 305538

AI Summary

  • Core Issue: The Authority failed to provide necessary utility invoices for two projects, leading to inaccuracies in the HUD-52722 form.
  • Impacted Requirements: Compliance with Special Tests and Provisions is compromised, affecting the accuracy of the Operating Fund subsidy calculation.
  • Recommended Follow-Up: Implement a system to ensure all supporting documentation for HUD-52722 forms is consistently maintained and submitted monthly.

Finding Text

Finding: 2023-003 Program Name: Moving to Work (ALN #14.881) Federal Awarding Agency: Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Type of Finding: Material Weakness; Material Noncompliance Qualification Criteria: The Authority is required to aggregate cost and consumption data from utility invoices for each Operating Fund project. This aggregated data is transferred to form HUD-52722 Calculation of Utilities Expense Level and used to determine the utility portion of the Operating Fund subsidy. Condition: We selected three projects to test the accuracy of Form HUD-52722 and verify utility invoices supporting utility costs and consumption. The Authority was unable to provide invoices supporting utility consumption and cost for two projects. In addition, water costs were overstated for one project resulting in overstatement of the UEL by $34,200. Cause: The Authority does not have controls in place to ensure supporting documents are maintained to support all HUD-52722 forms. Effect: The amounts reported on Form 52722 could not be verified resulting in a potential error in the operating subsidy. Auditor Recommendation: The Authority should maintain files with all supporting documentation for each HUD-52722. Questioned Costs: Undeterminable. Management’s Response: To ensure supporting documents are maintained to support all HUD-52722 forms, all privately managed Mixed-Finance developments will submit utility cost and consumption data to include copies of invoices to LMHA monthly. Utility cost and consumption data to include copies of invoices are already collected by LMHA managed sites.

Categories

Special Tests & Provisions HUD Housing Programs Material Weakness

Other Findings in this Audit

  • 395911 2023-001
    Material Weakness
  • 395912 2023-002
    Material Weakness
  • 395913 2023-003
    Material Weakness
  • 395914 2023-001
    Material Weakness
  • 395915 2023-002
    Material Weakness
  • 395916 2023-003
    Material Weakness
  • 395917 2023-001
    Material Weakness
  • 395918 2023-002
    Material Weakness
  • 972353 2023-001
    Material Weakness
  • 972354 2023-002
    Material Weakness
  • 972355 2023-003
    Material Weakness
  • 972356 2023-001
    Material Weakness
  • 972357 2023-002
    Material Weakness
  • 972358 2023-003
    Material Weakness
  • 972359 2023-001
    Material Weakness
  • 972360 2023-002
    Material Weakness
  • 972361 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.881 Moving to Work Demonstration Program $111.94M
14.879 Mainstream Vouchers $1.93M
14.871 Section 8 Housing Choice Vouchers $1.42M
14.889 Choice Neighborhoods Implementation Grants $1.19M
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $982,292
14.896 Family Self-Sufficiency Program $571,830
14.870 Resident Opportunity and Supportive Services - Service Coordinators $287,046