Finding Text
Non-Material Non‐Compliance
Significant Deficiency, Special Tests and Provisions
Criteria: In accordance with 24 CFR 964.150, when tenant participation funds are provided to a
Public Housing Authority (PHA), the PHA must provide those funds to duly elected resident
councils. Funding provided by a PHA to a duly elected resident council may be made only under a
written agreement between the PHA and the resident council that includes a resident council
budget. The agreement must require the local resident councils to account to the PHA for the use of
the funds and permit the PHA to inspect and audit the resident council’s financial records related to
the agreement.
Condition: The City did not follow procedures to ensure compliance of tenant participation fund
requirements.
Context: The tenant participation fund agreement was not current and expired in 2018. We
sampled 7 expenditure and supporting documentation reported to the PHA to determine if resident
council expenditure is consistent with the resident council budget. We noted that 4 (58%)
expenditures had proper supporting documentations but were not listed in the resident council
budget.
Effect: Expenditure made that are not consistent with the resident council budget.
Cause: Lack of proper internal control over tenant participation funds.
Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned
costs when likely questioned costs are greater than $25,000. Likely questioned costs do not exceed
$25,000.
Recommendation: Management should obtain a current agreement and implement controls to
ensure that tenant participation funds are in place and properly accounted for.
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this
finding. Please refer to the Corrective Action Plan section of this report.