Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The formula income is used to calculate the Operating Fund Revenue for each PHA. This calculation is generally based on prepopulated data calculated by HUD. However, in some cases Formula Income is not prepopulated. For further guidance review Formula Income Guidance the Operating Fund Web Page, the Annual Operating Subsidy Processing Notice and 24 CFR 990.195(d).
Condition: The HUD 52723 forms used for calculating subsidy contained errors. The Authority reported PILOT balances they did not have.
Questioned Costs: $91,552
Context: The Authority is required to complete HUD 52723 forms as part of their process of applying for subsidy. During this process, the Authority reported PILOT balances erroneously.
Cause: The Authority failed to maintain proper controls over their HUD 52723 forms.
Effect: The Authority received additional HUD funding in excess of what they would have otherwise received.
Recommendation: We recommend the Authority reviews their controls over submitting forms to HUD to ensure they contain accurate information.
Views of Responsible Officials: There is no disagreement with the audit finding. New CFO is preparing a Subsidy Calculation procedure so new staff will be aware of what is eligible and non-eligible transactions for preparing forms.