Finding 399827 (2023-007)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
$1
Year
2023
Accepted
2024-06-03
Audit: 307928
Auditor: Smith Marion

AI Summary

  • Core Issue: Housing Choice Voucher funds are being mismanaged, with over $3.3 million in interfund receivables not repaid for years.
  • Impacted Requirements: Funds should only be used for Housing Assistance Payments and related administrative fees, not for other expenses.
  • Recommended Follow-Up: Use unrestricted cash reserves to repay the Housing Voucher Program and improve cash management practices.

Finding Text

Criteria: PHAs may use Housing Choice Voucher program funds only for HAPs to participating owners, and for associated administrative fees (24 CFR section 982.151 and 982.152) Housing Assistance Payments(HAP) may not be used to cover administrative expense, nor may HAP (including RNP) be loaned, advanced, or transferred to other components units or other program. Condition: The interfund receivables and payables have not been repaid in several year. The balance continues to grow each year. Context: The Housing Choice Voucher Program's financial statement reflected a net interfund receivable of $3,350,212, representing more than 12 months of the program's monthly operating expenses. Cause: The Authority was not effectively monitoring and managing interfund program balances in order to ensure that program funds were not used for non-program purposes. Effect: The financial position of the Housing Voucher Program is at least temporarily impaired by the use of program funds for non-program purposes. Recommendations: We recommend that Authority utilize unrestricted cash reserves to repay the Housing Voucher Program and implement better cash management practices to eliminate future issues. Management Views: Management agrees with the finding see corrective action plan

Corrective Action Plan

inding 2023-007: lnterfund Balance Corrective Action: The software conversion to PHA-Web caused tremendous confusion and along with the inexperience of the prior fee accountants. This will be researched and corrected during FY 2024. Date Due: 6/30/2024 Person Responsible: Angela Farrish

Categories

Questioned Costs HUD Housing Programs Subrecipient Monitoring Cash Management Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 976269 2023-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $7.42M
14.872 Public Housing Capital Fund $1.04M
14.850 Public and Indian Housing $447,125