Finding 44822 (2022-002)

-
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-03-27
Audit: 44240
Organization: City of Hawthorne (CA)

AI Summary

  • Core Issue: The City submitted inaccurate unaudited financial information to HUD for the Housing Assistance Payment Program, leading to misstatements in revenue and expenses.
  • Impacted Requirements: Compliance with OMB Uniform Guidance requires timely and accurate financial reporting to HUD.
  • Recommended Follow-Up: The City should implement a thorough review process for all submissions to HUD and maintain proper documentation to support the reported figures.

Finding Text

2022-002 ? Reporting Noncompliance Federal Program Housing Assistance Payment Program Section 8, Assistance Listing No. 14.871 Criteria Per Section 4 L (1) Financial Reporting of the OMB Uniform Guidance Compliance Supplement, the public housing agency (PHA) must submit timely GAAP-based unaudited and audited financial information electronically to HUD. Condition During the audit, we noted the unaudited financial information submitted to HUD for the year ended June 30, 2022, contained a misstatement due to error. Cause The City erroneously overstated revenues and understated expenses for the program when preparing the reports. Effect The City could have been providing inaccurate information regarding its financial performance to the granting agency. Questioned Costs No questioned costs. Identification as a Repeat Finding This is a new finding for fiscal year 2022. Recommendation We recommend the City carefully review all information submitted to HUD to ensure accuracy of the information filed, as well as maintain backup of information used to compile the reports. Views of Responsible Officials See attached Corrective Action Plan.

Corrective Action Plan

Finance staff will review trial balances and expenditures versus expected program funding quarterly and at year end internally and with department?s grant coordinator. This will begin August 1, 2023, followed by another year end meeting November 1, 2023. Additionally, expected new internal new hire will add an extra layer of review to the process.

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $8.11M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.75M
20.106 Airport Improvement Program $1.28M
16.922 Equitable Sharing Program $1.04M
14.218 Community Development Block Grants/entitlement Grants $801,676
14.248 Community Development Block Grants_section 108 Loan Guarantees $387,356
20.600 State and Community Highway Safety $276,908
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $106,649
16.034 Coronavirus Emergency Supplemental Funding Program $70,528
16.738 Edward Byrne Memorial Justice Assistance Grant Program $39,876
14.239 Home Investment Partnerships Program $28,552