Finding 396726 (2022-015)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2024-05-15

AI Summary

  • Core Issue: Fayetteville Housing Authority misused federal funds intended for specific repairs by spending them on unrelated costs.
  • Impacted Requirements: Federal awards stipulate that funds must only be used for designated purposes, which in this case were repairs to HVAC and plumbing systems.
  • Recommended Follow-Up: Review all expenditures related to the Emergency Grant and repay any funds not used for the approved repairs.

Finding Text

2022-015 Misappropriation of Capital Fund Reserve for Emergencies and Natural Disasters Federal Awards: 14-872 Capital Fund Program Criteria: Housing Authorities are permitted to expend federal funds in accordance with the agreements stated forth in the awards and not for any other purpose. Condition: On September 1, 2017, the Fayetteville Housing Authority requested emergency funding from the Capital Fund Reserve for Emergencies and Natural Disaster Funds for the replacement of HVAC piping, domestic water piping and sewer line piping at the Fayetteville Housing Authority's Hillcrest Towers, in the amount of $3,810,271. The Fayetteville Housing Authority had two years to fully expend the grant. Fayetteville Housing Authority may not use this funding for any other purpose other than the replacement of HVAC piping, domestic water piping and sewer line piping at Hillcrest Towers. Fayetteville Housing Authority may not use this funding to pay for deferred maintenance or the cost of operations. The Fayetteville Housing Authority used some of the funding designated for HVAC piping, domestic water piping and sewer line piping for relocation costs, food allowances and other Fayetteville Housing Authority expenses for Fayetteville Housing Authority tenants misplaced by the repairs taking place at Hillcrest Towers. Questioned Costs: Cannot be determined, due to incomplete information. Effect: The Fayetteville Housing Authority misused federal funding. Cause: Lack of oversight by prior Fayetteville Housing Authority Management. Recommendation: We recommend the Fayetteville Housing Authority review all expenditures related to the Emergency Grant and ensure that those expenditures were only for the replacement of HVAC piping, domestic water piping and sewer line piping. If expenditures are not related to the replacement of piping, the Fayetteville Housing Authority should make arrangement to repay those funds to the funding agency.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Actions: Fayetteville Housing Authority will thoroughly examine all expenses associated with the Emergency Grant to confirm that these expenditures exclusively pertain to the replacement of HVAC piping, domestic water piping, and sewer line piping. Should any expenses be found unrelated to piping replacements, Fayetteville Housing Authority will assess available options for reimbursing those funds to the funding agency.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 396719 2022-008
    Material Weakness Repeat
  • 396720 2022-009
    Material Weakness Repeat
  • 396721 2022-010
    Material Weakness Repeat
  • 396722 2022-011
    Material Weakness Repeat
  • 396723 2022-012
    Material Weakness Repeat
  • 396724 2022-013
    Significant Deficiency Repeat
  • 396725 2022-014
    Significant Deficiency Repeat
  • 396727 2022-016
    Material Weakness Repeat
  • 396728 2022-017
    Significant Deficiency Repeat
  • 396729 2022-018
    Material Weakness Repeat
  • 396730 2022-019
    Material Weakness Repeat
  • 396731 2022-020
    Significant Deficiency Repeat
  • 396732 2022-021
    Significant Deficiency Repeat
  • 973161 2022-008
    Material Weakness Repeat
  • 973162 2022-009
    Material Weakness Repeat
  • 973163 2022-010
    Material Weakness Repeat
  • 973164 2022-011
    Material Weakness Repeat
  • 973165 2022-012
    Material Weakness Repeat
  • 973166 2022-013
    Significant Deficiency Repeat
  • 973167 2022-014
    Significant Deficiency Repeat
  • 973168 2022-015
    Material Weakness Repeat
  • 973169 2022-016
    Material Weakness Repeat
  • 973170 2022-017
    Significant Deficiency Repeat
  • 973171 2022-018
    Material Weakness Repeat
  • 973172 2022-019
    Material Weakness Repeat
  • 973173 2022-020
    Significant Deficiency Repeat
  • 973174 2022-021
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $686,857
14.U03 Component Unit- Blended $285,926
14.871 Section 8 Housing Choice Vouchers $72,983
14.U02 Tenant Based Rental Assistance $30,150
14.879 Mainstream Vouchers $7,872
14.U01 Esg- Covid $3,976
14.850 Public Housing Cares Act Fund $414
14.872 Public Housing Capital Fund $0