Finding Text
Finding Reference 2022-007 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title and ALN: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation (ALN 14.856) Compliance Requirement: Reporting ? Financial Reporting (L) (MW) Type of finding: Material Weakness in Internal Control (MW), Instance of Noncompliance (NC) Statement of Condition During our audit procedures over the reporting of FASS-PH System, we noted that the Unaudited REAC report for fiscal year June 30, 2022 was not submitted. Criteria Financial Assessment Sub-system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The Uniform Financial Reporting Standards requires PHA to submit the Unaudited REAC 60 days after fiscal year end. Due to the COVID-19 Pandemic, a waiver was granted, extending the due date 60 more days (October 31, 2021) after fiscal year end. The FASS-PH system is one of HUD?s main monitoring and oversight system for the HCVP. Cause of Condition The program staff faced performance challenges due to the COVID-19 Pandemic, also the accounting records were delayed for such event. Effect of Condition The Municipality failed to submit the required REAC report within the 60 calendar days required by the regulation, which leads to the noncompliance of the reporting requirement. Recommendation We recommend to the Municipality?s management to implement proper internal controls in order to ascertain that the reports are submitted timely. Questioned Costs None Prior-Year Finding This finding is similar to prior year finding 2021-008, 2020-011 and 2019-010. View of Responsible Official and Planned Corrective Action Plan As indicated for the finding 2022-004, the Section 8 Program is taking corrective action measurements addressed to achieve the timely submission of GAAP-based unaudited financial data and audited financial information electronically to HUD. As a part of such measurements, a new accountant has been recruited by the Section 8 Program, to who was assigned the responsibility of prepare and submit, on a timely basis, the required financial information, in accordance with the guides established by HUD. The Central Accounting Department have established a work sheet to be used as model by the accountant to collect and organize financial information to be used in the preparation of required financial reports. Implementation Date March 31, 2024 Responsible Person Mr. Job Bonilla, Federal Program Director