Finding Text
Noncompliance and Internal Controls over Compliance for Special Tests and Provisions
Identification data: U.S. Department of Agriculture – Rural Rental Housing Loan, Assistance Listing No. 10.415.
Criteria: The Authority’s agreements with the U.S. Department of Agriculture – Rural Rental Housing Loan program require the Authority to deposit $24,223 to the reserve account annually until the total reaches $288,000.
Condition: The Authority made deposits to the reserve account totaling $21,050 during the year and the reserve balance was under the $288,000. The deposits did not meet the total required by the agreement.
Cause: A breakdown in the Authority’s internal controls over special tests and provisions did not allow the Authority to meet the reporting requirements under the award agreements.
Effect or potential effect: The control deficiency is a significant deficiency that prevented the Authority from complying with the special tests and provisions requirements of the award agreements.
Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2022-005.
Recommendation: The Milford Housing Authority should review its system of internal control over special tests and provisions to determine improvements that can be made to ensure the Authority actively tracks and adheres to reserve requirements outlined in its award agreements.
Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority will evaluate its system of internal control over special tests and provisions to determine how the Authority can better monitor and comply with reserve requirements of its award agreement.