Finding 949076 (2023-006)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-06
Audit: 293712

AI Summary

  • Core Issue: The initial balances for HAP and Administrative Fee Equity were not validated, leading to a material weakness in internal controls.
  • Impacted Requirements: Compliance with 24 CFR 982.158 (a) is at risk due to inadequate record-keeping and failure to reconcile prior-year balances.
  • Recommended Follow-Up: Management should reconcile the HAP and Administrative Fee Equity balances and document the reconciliation process thoroughly.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development: Section 8 Housing Choice Vouchers (ALN 14.87 1) Compliance Requirement: Special Test – Rolling Forward Equity Balances Type of finding: Material Weakness in Internal Control (MW), Instance of Noncompliance (NC) Statement of Condition: In our audit, we did not obtain evidence to validate the initial balances of HAP (Housing Assistance Payments) Equity and Administrative Fee Equity. From the account analysis, we found evidence that the current HAP and Administrative Fee Equity balances are accurate. However, we identified that the initial balances have not yet been subjected to an adequate analysis for a prior-year correction, and proper correction has not yet been implemented. Criteria 24 CFR 982.158 (a) 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 bein the format required by HUD, including requirements governing computerized or electronic forms of record-keeping. Cause of Condition The Municipality's accountants failed to reconcile the prior year's HAP (Housing Assistance Payments) Equity and Administrative Fee Equity balances. Effect of Condition The Municipality did not have proper accounting records to allow them to maintain complete and accurate accounting records and detect errors in a timely manner. Recommendation We recommend that management reconcile the HAP (Housing Assistance Payments) Equity and Administrative Fee Equity balance and thoroughly document the process. Questioned Costs None

Categories

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 372632 2023-004
    Material Weakness Repeat
  • 372633 2023-005
    Significant Deficiency
  • 372634 2023-006
    Material Weakness Repeat
  • 372635 2023-007
    Material Weakness Repeat
  • 372636 2023-007
    Material Weakness Repeat
  • 949074 2023-004
    Material Weakness Repeat
  • 949075 2023-005
    Significant Deficiency
  • 949077 2023-007
    Material Weakness Repeat
  • 949078 2023-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $15.08M
93.600 Head Start Program $7.94M
14.871 Section 8 Housing Choice Vouchers $7.02M
14.218 Community Development Block Grants - Entitlement Grants $3.60M
20.500 Cares Act Federal Transit - Capital Investment Grants $2.16M
17.278 Wioa Dislocated Worker Formula Grants $2.16M
93.600 Covid-19 Head Start Program $1.34M
17.259 Wioa Youth Activities $1.33M
17.258 Wioa Adult Program $1.12M
97.036 Disaster Grants - Public Assitance (presidentially Declared Disasters) $953,515
97.067 Homeland Security Program - Shsp & Shsg $707,466
14.228 Community Development Block Grant - Disaster Recovery - City Revitalization Program $649,878
10.558 Child and Adult Care Food Program $646,748
14.228 Community Development Block Grant - Disaster Recovery $509,814
20.500 Federal Transit - Capital Investment Grants $410,174
17.258 Wioa Youth Program $366,382
14.231 Emergency Solutions Grants Program $295,941
14.856 Lower Income Housing Assitance Programs Section 8 - Moderate Rehabilitation II $284,480
14.239 Home Investment Partnership Program $159,659
17.259 Wioa Dislocated Worker Formula Grants $118,317
14.871 Ehv Emergency Housing Voucher $105,870
14.241 Housing Opportunities for Persons with Aids $92,601
14.267 Continuum of Care Program (coc) $31,172
14.856 Lower Income Housing Assitance Programs Section 8 - Moderate Rehabilitation I $14,049
93.356 Head Start Disaster Recovery From Hurricanes Harvey, Irma and Maria $5,925
45.025 Partnership Agreements (arpa) $4,800