Finding 512309 (2022-006)

2022-006 – Missing Contracts/Agreements with HUD (SD) Federal Program Title: Section 8 Housing Choice Vouchers Assistance Listing Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Category of Finding: Special Tests and Provisions Criteria: Pursuant to Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance Supplement April 2022 Part 4 14.871, the Annual Contribution contract (ACC) establishes the amounts HUD will provide a housing authority for housing assistance payments (HAP) and administrative fees. In addition, CARES Act -HCV Program HAP Supplemental Funding and Administrative Fees were made available to the City in FY 2022. The amounts provided are identified in SF-424. The City should retain a copy of the ACC and the SF-424 for purposes of the audit. Condition: The City was unable to provide a copy of the ACC and SF-424. It appears that the current personnel at the Local Housing Authority were not aware of the existence of the ACC and SF-424 for FY 2022. Cause: The turnover of key personnel responsible for document retention and management, coupled with inadequate handover procedures, resulted in the failure to retain or properly transfer documents to new staff members. Effect or Potential Effect: We were unable to perform some of the procedures to ensure that the reported expenditures were in line with the approved funding. Questioned Cost: None. Context: It appears that the current personnel at the Local Housing Authority were not aware of the existence of the ACC and SF-424 for FY 2022. Statistical Sampling Validity: Not applicable. No sampling was performed. Repeat of a Prior-Year Finding: No. Recommendation: The City should establish a formalized procedure for documentation management that includes clear guidelines for document retention. Additionally, there should be a structured transition process when staff turnover occurs to ensure all key responsibilities and documents are properly handed over. This may include a centralized document repository and mandatory documentation of transitions between employees. Management Response and Corrective Action Plan City's Response: The City concurs with the recommendation. Corrective Action Plan: The new grants policy will be reviewed and approved by the City Manager and implemented by March 2025. Planned Implementation Date: March 2025 Responsible Person(s): City Manager