Finding 6386 (2023-002)

2023-002 Condition: Questionable Use of Federal Funds The Authority ran a deficit in the Central Office Cost Center (COCC) during the year ended March 31, 2023 primarily because the COCC has expended Low Income Public Housing (LIPH) funds to support the COCC operations in violation of Federal Rules and Regulations. Through the year ended March 31, 2023, the Authority has accumulated in excess of $:144,097 in COCC administrative operating costs above those normally covered by management fees, capital asset fees, and bookkeeping fees. Assistance Listing #: 14.850 Questioned Costs: Unknown Criteria: 0MB Uniform Guidance regarding eligible and ineligible costs. Cause/Effect: Lack of oversight and long-range planning in accordance with HUD's requirements. Recommendation: We recommend that the Authority review its internal control procedures over the budgeting process sufficient to ensure that each program operates both in accordance with its budget and within its means, and for the Authority to provide a work-out plan for the COCC to substantially reduce its costs or to generate additional revenue. Reply: We concur with this finding and the Auditor's recommendation. We will establish internal financial control procedures over the budget process to ensure that each program operates within its means and in accordance with HUD regulations. We have already taken steps to reduce expenses in the COCC and will generate revenue from grants and other business activity to offset the COCC expenses. Management will take corrective action to close this finding in connection with the FY 2024 audit report.