Finding Text
2022-003 REAC/FDS and Financial Statement Reporting (Material Weakness)
CFDA No.: 14.872 and 14.850
Agency: U.S. Department of Housing and Urban Development
Criteria: Public Housing Authorities (PHA) are required to submit unaudited financial statement
information through the REAC system within two months of the PHA’s fiscal year-end (24 CFRR
section 5.801). Additionally, a PHA is required to submit its audited financial statements
annually within nine months after its year-end (24 CFR section 5.801).
Condition: We noted that management of the Authority did not submit its financial information
in the REAC system in a timely manner nor did it submit audited financial statements to HUD in
a timely manner.
Context: During our audit of the Authority, we noted that management submitted its REAC and
FDS reporting information after the due date as established by the terms of the grant.
Additionally, the audited financial statements were not submitted prior to the due date.
Effect: Management and the Board were not in compliance with the requirements of the
Uniform Guidance.
Cause: Due to a change in management at the Authority and the training that was, and still is,
required by management, the FDS submission and the audited financial statements were not
filed timely. Management of the Authority tasked with performing the FDS submission and
tasked with providing updated, accurate financial information necessary to have an audit
performed did not possess the requisite accounting knowledge to properly complete these
tasks.
Questioned costs: None.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that management of the Authority review the deadlines for
FDS submission and the financial statement submission and work with the newly retained fee
accountant to ensure that these deadlines are met in the future.
Management’s response: The Authority has had some staff turnover over the past several
years. A new executive director and a new account clerk were both hired within the past
several years. Management was aware that its submissions were not timely. Management
engaged the services of a fee-accountant subsequent to year-end who will assist with
these submissions going forward.