Finding 42674 (2022-002)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2022-12-29

Audit: 53305

Organization: Fall River Housing Authority (RI)

Auditor: Marcum LLP

AI Summary

Core Issue: The Authority submitted the unaudited Financial Data Schedule (FDS) late, missing the July 15, 2022 deadline by over four months.
Impacted Requirements: Timely filing of financial reports is crucial for HUD's oversight and decision-making regarding public housing programs.
Recommended Follow-Up: The Authority should improve its year-end closing process to ensure timely submission of financial reports in the future.

Finding Text

2022-002 ? INTERNAL CONTROL OVER FINANCIAL REPORTING MATERIAL WEAKNESS/MATERIAL NONCOMPLIANCE CRITERIA Filing of financial reports. (1) For entities listed in paragraphs (a)(1) and (2) of this section, the financial information to be submitted to HUD in accordance with paragraph (b) of this section, must be submitted annually, no later than 60 days after the end of the fiscal year of the reporting period, and as otherwise provided by law (for public housing agencies, see also 24 CFR 903.33). (24 CFR 5.801(c)) CRITERIA The unaudited FDS was required to be submitted to HUD by July 15th, 2022, which includes HUD?s 15 day grace period. The Authority submitted the FDS on November 18th, 2022. CAUSE Due to a miscommunication between the Authority staff and fee accountant, the unaudited FDS report was not submitted timely. EFFECT Failure to submit information timely hinders HUD?s ability to monitor and make decisions about the programs.QUESTIONED COSTS None identified. CONTEXT All PHA?s that administer Public and Indian Housing and Capital Fund Programs are required to prepare and submit an unaudited FDS to HUD within 75 days of the end of its fiscal year. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority review their year end closing process to ensure that adequate procedures are in place to ensure financial reports are submitted timely.

Corrective Action Plan

INTRODUCTION: The last three years have been challenging to the FRHA on many fronts. There were vacancies in several key executive management positions, the Executive Director abruptly retired, and particularly the Director of Finance position had seen three people serve in that role. There was also the COVID-19 pandemic, where key staff people were absent, or working remotely as labor laws were relaxed. Emergency Contracts were issued with many of the formal bidding policies and procedures being forgiven, making it more difficult on internal controls over financial reporting. REMEDY: Stability has been restored with the hiring of a new Executive Director and Deputy Executive Director along with the Director of Finance position. The FRHA is working closely with HUD and DHCD officials, in setting up automated reminders of all Financial Reporting Deliverables to all key personnel. The Executive Director is also meeting bi-monthly with all FRHA Financial team members to review monthly financial requirements. The Executive Director is further forging a stronger professional relationship with the FRHA Fee Accountants and Auditors to establish better communication on all Financial Controls.

Other Findings in this Audit

42675 2022-002

Material Weakness
619116 2022-002

Material Weakness
619117 2022-002

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
14.871	Section 8 Housing Choice Vouchers	$18.95M
14.850	Public and Indian Housing	$10.52M
14.872	Public Housing Capital Fund	$4.90M
14.871	Section 8 Housing Choice Vouchers Cares	$1.29M
14.267	Continuum of Care Program	$364,108
14.896	Family Self-Sufficiency Program	$128,176
21.019	Coronavirus Relief Fund	$0