Finding Text
Finding 2024-002: Allowable Activities
Public Housing - 14.850, Housing Choice Voucher – 14.871
Material Weakness/Noncompliance – Activities Allowed or Unallowed
Repeat Finding: 2023-003.
Criteria: In the Public Housing program, transfers out of the operating fund can only occur in very limited circumstances. This would preclude the Authority from using operating funds to provide temporary loans to programs with the Authority. Interfund transactions indicate the existence of temporary loans.
In the Housing Choice Voucher program, the transfers of HAP, and associated administrative fees, even temporarily, to support another program or use are not allowed and could be considered a breach of the annual contributions contract.
Condition: The Public Housing program pays all the bills and is to be reimbursed by the Voucher program for its portion. During our audit, we noted the Voucher program was not reimbursing timely or for the full amount. The balance Voucher owed Public Housing had increased from $11,648.18 at June 30, 2023 to $23,142.26 at June
30, 2024 and in reviewing the general ledger, the balance was not being paid back monthly and had remained consistent throughout the year.
Further, we noted a lack of segregation of duties regarding allowable activities which could allow an unallowed activities to occur and not be identified in a timely fashion. The Authority indicated in the Summary Schedule of Prior Audit Findings this was corrected.
Cause: The Authority indicated its monthly financial reports were significantly behind and it was unaware of the amount to reimburse.
Effect or Potential Effect: Interprogram balances were not being repaid timely. Further, due to the lack of segregation of duties, the control deficiencies result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected.
Recommendation: The Authority should review its allocation system and document the justification for it. The justification should be relevant to the expense being allocated.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.