FINDING NUMBER 2023-007
FEDERAL PROGRAM HOUSING VOUCHER CLUSTER:
SECTION 8 HOUSING CHOICE VOUCHERS/ EMERGENCY HOUSING VOUCHERS
(ASSISTANCE LISTING NUMBERS 14.871/ 14.EHV)
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
TYPE OF FINDING MATERIAL WEAKNESS AND INSTANCE OF NONCOMPLIANCE
COMPLIANCE
REQUIIREMENT REPORTING
CONDITION The Program did not comply with the financial and special reporting requirements, as follows:
1. The GAAP-based audited financial information of the programs for the fiscal year ended June 30, 2023, was not submitted on time through the FASS-PH system.
2. The expenditures reported in the Voucher Management System (VMS) for the fiscal year ended June 30, 2023, have differences with the amounts reported in the draft audited financial information for the fiscal year ended June 30, 2023, submitted through the FASS-PH system, as follows:
HOUSING CHOICE VOUCHERS VMS FASS-PH DIFFERENCE
Operating and Administrative $ 87,751 $ 114,508 $ (26,757)
Housing Assistance Payments 527,986 540,385 (12,399)
HAP Portability-in 224,441 226,604 (2,163)
Total $ 840,178 $ 881,497 $ (41,319)
EMERGENCY HOUSING VOUCHERS VMS FASS-PH DIFFERENCE
Operating and Administrative $ 6,435 $ 8,183 $ (1,748)
Total Operating -Tenants 500 500 -
Emergency Housing Vouchers 41,191 46,407 (5,216)
Total $ 48,126 $ 55,090 $ (6,964)
CRITERIA 24 CFR, Section 982.158 (a) (b) states that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record-keeping. Also, the PHA must furnish HUD accounts and other records, reports, documents, and information, as required by HUD.
Also, 24 CFR, Section 5.801 (b), submission of financial information. Entities to which this subpart is applicable must provide to HUD such financial information as required by HUD. Such information must be provided on an annual basis, except as required more frequently under paragraph (c) (4) of this section. This information must be: (1) prepared in accordance with Generally Accepted Accounting Principles; (2) submitted electronically to HUD through the internet, or in such other electronic format designated by HUD, or in such non-electronic format as HUD may allow if the burden or cost of electronic reporting is determined by HUD to be excessive.
In addition, Section 5.801 (d), reporting compliance dates. Unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F.
CAUSE The internal controls and procedures maintained by the Municipality failed to ensure the accuracy of the expenditures reported in the VMS and the timely submission to HUD of the GAAP based audited financial information.
EFFECT The lack of proper filing of required financial reports may lead HUD to impose special conditions regarding the use of funds to the Municipality. Also, HUD relies on key line items of the reports to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Accordingly, future funding for the Municipality may be affected negatively.
RECOMMENDATION The Municipality should continue strengthening the established internal controls and procedures to submit to HUD the financial reports according to applicable requirements.
QUESTIONED COSTS None
PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2022-007).
VIEWS OF RESPONSIBLE
OFFICIALS AND PLANNED
CORRECTIVE ACTION Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements, and to reconcile the amounts reported in the Voucher Management System (VMS) with the accounting records and proceed with any necessary corrections about the information previously reported. Moreover, the audited financial data schedule for the fiscal year 2022-2023 will be submitted as soon as the Single Audit Report be finally issued by the external auditors.