Finding 403059 (2023-002)

Finding 2023-002 – Annual Property Budgets Not Submitted / Not Submitted Timely (Material Weakness, Material Non-Compliance) Rural Rental Assistance Payments Program – Assistance Listing No. 10.427; Grant Period: Fiscal Year-End September 30, 2023 Criteria The Multi-Family Housing Programs and Asset Management Handbook (HB-2-3560) and the Code of Federal Regulations (CFR) Title 7, Subtitle B, Chapter XXXV, Part 3560 applicable to the Department of Agriculture, Rural Rental Housing provides guidance and criteria under which the Rural Rental Housing Payments Program is to be administered and operated. Specifically, CFR 3560.303(a) specifies that an annual housing project budget must be submitted to the Rural Housing Service of the U.S. Department of Agriculture prior to the start of the applicable housing project’s fiscal year. Condition and Perspective The Authority did not submit fiscal year 2024 budgets appliable to its three Rural Rental Assistance properties. Questioned Costs - None Cause Failure to complete and submit property budgets. Failure to execute controls over budgeting requirements of the Program. Effect Non-compliance with federal requirements of the Program. Recommendation We recommend that the Authority complete and submit budgets applicable to each of its Program properties prior to the beginnings of subsequent fiscal years. Management’s Response The Authority will complete and submit budgets applicable to each of its Program properties prior to the beginnings of subsequent fiscal years. The Authority’s Executive Director, Jeff Sklet has assumed the responsibility of executing this corrective action as of July 1, 2024.