Finding 498679 (2023-002)

Unallowable Use of Housing Choice Voucher Cluster Programs’ Funds (Material Weakness, Material Non-Compliance) Section 8 Housing Choice Voucher Program (Housing Choice Voucher Cluster) – Assistance Listing No. 14.871, Emergency Housing Voucher Program (Housing Choice Voucher Cluster) – Assistance Listing No. 14.EHV, Grant Period: Year-End December 31, 2023 Criteria The cost principles in 2 CFR Part 200, Sub-part E of the Uniform Guidance describe allowable and unallowable uses of federal award program subsidies. Parts 200.403 and 200.405 prohibit the use of federal award program subsidies to fund expenditures outside of the applicable federal award program. Specifically, the Section 8 Housing Choice Voucher and Emergency Housing Voucher Programs’ subsidies and reserves cannot be used to fund expenditures and/or deficits of other federal or non-federal programs, except through allowable Management and Book-keeping Fees. Condition and Perspective During 2023, the Authority’s Section 8 Housing Choice Voucher Program advanced $255,941 out of its Program. The Emergency Housing Choice Voucher Program advanced $186,741 out of its Program. Questioned Costs – $255,941 and $186,741 from the Programs. Cause Lack of non-federal funds available to finance non-federal expenditures. Effect Non-compliance with federal Allowable Cost requirements. Recommendation We recommend that the Authority limit advancing funds from the Section 8 Housing Choice Voucher and Emergency Housing Voucher Programs, to allowable Fees only as specified in the Uniform Guidance and applicable HUD literature. Management’s Response The Authority will limit advancing funds from the Section 8 Housing Choice Voucher and Emergency Housing Voucher Programs, to allowable Fees only. The Authority’s Executive Director, Trey George, has assumed the responsibility of executing this corrective action as of November 1, 2024.