Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program, Section 8 Housing Choice Vouchers
Program
Federal Assistance Listing Numbers: 14.850, 14.871
Noncompliance – N. Special Tests and Provisions – Depository Agreements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: PHAs are required to enter into depository agreements with their financial institution using the
HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC).
Condition: Based on inspection of files and discussions with management, it was determined that
depository agreements were not on file during the time of audit.
Context: The Authority did not have depository agreements with their financial institutions on file during
the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements.
Findings – Federal Award Program Audit (continued)
Finding 2024-002 (continued)
Cause: There is a significant deficiency in internal controls over compliance for the special tests and
provision type of compliance related to depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered
management company that assures the program is in compliance.
Effect: The Public and Indian Housing Program is in non-compliance with the special tests and provisions
type of compliance related to depository agreements.
Recommendation: We recommend that the Authority properly file HUD-51999 forms in accordance with HUD guidelines.
Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor and will properly file HUD-51999 forms in accordance with HUD guidelines. Ivy Melendez, Executive Director, will be responsible to implement this corrective action by September 30, 2025.