Finding Text
Condition: The Municipality did not submit the June 30, 2022, fiscal year end GAAP-based unaudited financial information electronically to HUD. Context: The Municipality was required to submit to HUD unaudited financial information for the June 30, 2022, fiscal year end by August 30, 2022. The Municipality did not submit the June 30, 2022, unaudited financial information to HUD on or before August 30, 2022. Criteria: The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited financial information electronically to HUD. Unaudited financial statements are required 60 days after the PHA?s fiscal year end. The responsibility for the submission of the financial report due to HUD under this section rests with the PHA. Financial reporting requirements (24 CFR section 902.33) require PHAs to submit their unaudited financial data to HUD on an annual basis. The financial information must be prepared in accordance with Generally Accepted Accounting Principles (GAAP), as further defined by HUD in supplementary guidance and submitted electronically in the format prescribed by HUD using the Financial Data Schedule (FDS). The unaudited financial information must be submitted to HUD annually, no later than 2 months after the PHA?s fiscal year end. Cause: Although the Municipality was aware of the reporting requirement, management was not able to compile the necessary information for the electronic submission within the 60 days? timeframe. Effect: As per 24 CFR 902.62 if a PHA, without a finding of good cause by HUD, submits its unaudited year-end financial information more than 15 days past the due date, appropriate sanctions may be imposed, including a reduction of one point in the total PHAs score for each 15-day period past the due date. If the unaudited year-end financial information is not received within 3 months past the due date, or extended due date, the PHA will receive a presumptive rating of failure for its unaudited information and shall receive zero points for its unaudited financial information and the final financial condition indicator score. The subsequent timely submission of audited information does not negate the score of zero received for the unaudited year-end financial information submission. If a PHA does not submit its unaudited information, it will receive a zero for management operations. Auditor?s Recommendation: The Municipality should implement internal controls and procedures to ensure they submit unaudited financial information to HUD by the due date to minimize penalties and the reduction of points on program performance. The Municipality should train program employees to complete this required report.