Town of SaugertiesLocal Government

Finding 2024-010 Reporting – Compliance and Internal Control U.S. Department of Housing and Urban Development 14.871 – Section 8 Housing Choice Voucher Condition: During review of the Housing Choice Voucher program, RBT noted that the PHA did not submit timely GAAP-based unaudited and audited financial information to HUD after year end, within two and a half months for unaudited, and nine months for audited. RBT also noted that the PHA did not submit the SEMAP performance reporting. Criteria: As a condition of receiving federal awards, the Town agrees to comply with 24 CFR section 985.3(h), and the provisions of grant agreements and contracts, and to also maintain internal controls to provide reasonable assurance of compliance with these requirements. Cause: The Town did not have controls in place to ensure that appropriate audit ready information/documentation was available in order for the unaudited FDS submission and audit to be conducted in a timely manner. The Executive Director was not aware of the annual SEMAP reporting requirement. Effect: Potential loss of funding due to noncompliance. Questioned Costs: None identified. Perspective: The GAAP-based unaudited and audited information and the SEMAP reporting were not filed timely. Repeat Finding: Repeat Finding of 2023-010. Recommendation: We recommend that the Town implement procedures to ensure that all required information/documentation is prepared timely such that the Town can submit the unaudited and audited financial information to HUD timely. Auditee’s Response: See corrective action plan.

Finding 2024-011 Special Tests and Provisions: Depository Agreements - Compliance and Internal Control U.S Department of Housing and Urban Development 14.871 – Section 8 Housing Choice Vouchers Condition: During review of the Housing Choice Voucher program, RBT noted that the PHA did not have a depository agreement on file with its financial institution until August 2024. Criteria: PHAs are required to enter into depository agreements with their financial institution using form HUD-51999 or a form required by HUD in the ACC. The agreements serve as safeguards for Federal funds and provide third-party rights to HUD. Cause: The Town did not have controls in place to ensure that the agreement was obtained and available upon request. Once the Town was made aware of the requirement, they contacted their financial institution to obtain the agreement, but were unable to obtain a Depository Agreement for several months upon request. Effect: Lack of safeguards could put the PHA’s assets at risk. Questioned Costs: None identified. Perspective: The PHA did not have a depository agreement on file for their one financial institution. Repeat Finding: Repeat Finding of 2023-011. Recommendation: RBT noted that the Town obtained the required Depository Agreement as of August 2024. RBT recommends that the Town implement controls such that required Depository Agreements are obtained when opening accounts at new banks. Auditee’s Response: See corrective action plan.

Finding 2024-012 Single Audit Reporting – Compliance and Internal Control Condition: The Town did not submit the audit and Data Collection Form within the nine-month due date for fiscal year 2024. Criteria: According to OMB Circular A-133, Subpart B-Audits §___.200(a), and Uniform Guidance, 2 CFR 200.501(a), non-Federal entities that expend $750,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of these parts. The audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Cause: The Town did not have controls in place to ensure timely filing of the single audit and Data Collection Form. Effect: The Town is not in compliance with OMB Circular A-133, Subpart B-Audits 200(a), and Uniform Guidance, 2 CFR 200.501(a). Questioned Costs: None identified. Perspective: This is a systemic issue in that controls over the requirements have not been developed to ensure no issues arise. Repeat Finding: Repeat Finding of 2023-012. Recommendation: RBT recommends that the Town develop a closing checklist and timeline so that the books are closed and the audit completed in a timely manner. Auditee’s Response: See corrective action plan.

Finding 2024-013 Procurement, Suspension and Debarment – Internal Control U.S. Department of Housing and Urban Development 21.027 – Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Condition: The Town did not have sufficient internal controls over debarment. Criteria: CSLFRF recipients are required under 48 CFR section 9.405-2(b) and the clause at 48 CFR section 52.209-6 to ensure federal funds are not used to pay contractors that are debarred. Cause: The Town did not have policies in place to review contractors for suspension and debarment. Effect: Debarment was not verified. Questioned Costs: None identified. Perspective: None of the transactions tested were with contractors that were suspended or debarred. Repeat Finding: Repeat Finding of 2023-013. Recommendation: RBT recommends that the Town review its internal controls process for procurement and revise the procurement policy to include suspension and debarment procedures when spending federal funds. Auditee’s Response: See corrective action plan.

Finding 2023-010 Reporting – Compliance and Internal Control U.S. Department of Housing and Urban Development 14.871 – Section 8 Housing Choice Voucher Condition: During review of the Housing Choice Voucher program, RBT noted that the PHA did not submit timely GAAP-based unaudited and audited financial information to HUD after year end, within two and a half months for unaudited, and nine months for audited. RBT also noted that the PHA did not submit the SEMAP performance reporting. Criteria: As a condition of receiving federal awards, the Town agrees to comply with 24 CFR section 985.3(h), and the provisions of grant agreements and contracts, and to also maintain internal controls to provide reasonable assurance of compliance with these requirements. Cause: The Town did not have controls in place to ensure that appropriate audit ready information/documentation was available in order for the unaudited FDS submission and audit to be conducted in a timely manner. The Executive Director was not aware of the annual SEMAP reporting requirement. Effect: Potential loss of funding due to noncompliance. Questioned Costs: None identified. Perspective: The GAAP-based unaudited and audited financial information and the SEMAP reporting were not filed timely. Repeat Finding: Repeat of finding 2022-007. Recommendation: RBT recommends that the Town implement procedures to ensure that all required information/documentation is prepared timely such that the Town can submit the unaudited and audited financial information to HUD timely. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2023-011 Special Tests and Provisions: Depository Agreements – Compliance and Internal Control U.S. Department of Housing and Urban Development 14.871 – Section 8 Housing Choice Vouchers Condition: During review of the Housing Choice Voucher program, RBT noted that the PHA did not have a depository agreement on file with its financial institution until August 2024. Criteria: PHAs are required to enter into depository agreements with their financial institution using form HUD-51999 or a form required by HUD in the ACC. The agreements serve as safeguards for Federal funds and provide third-party rights to HUD. Cause: The Town did not have controls in place to ensure that the agreement was obtained and available upon request. Once the Town was made aware of the requirement, they contacted their financial institution to obtain the agreement, but were unable to obtain a Depository Agreement for several months upon request. Effect: Lack of safeguards could put the PHA’s assets at risk. Questioned Costs: None identified. Perspective: The PHA did not have a depository agreement on file for their one financial institution. Repeat Finding: Repeat of finding 2022-008. Recommendation: RBT noted that the Town obtained the required Depository Agreement as of August 2024. RBT recommends that the Town implement controls such that required Depository Agreements are obtained when opening accounts at new banks. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2023-012 Single Audit Reporting – Compliance and Internal Control Condition: The Town did not submit the audit and Data Collection Form within the nine-month due date for fiscal year 2023. Criteria: According to OMB Circular A-133, Subpart B-Audits §___.200(a), and Uniform Guidance, 2 CFR 200.501(a), non-Federal entities that expend $750,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of these parts. The audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Cause: The Town did not have controls in place to ensure timely filing of the single audit and Data Collection Form. Effect: The Town is not in compliance with OMB Circular A-133, Subpart B-Audits §___.200(a), and Uniform Guidance, 2 CFR 200.501(a). Questioned Costs: None identified. Perspective: This is a systemic issue in that controls over the requirements have not been developed to ensure no issues arise. Repeat Finding: This is not a repeat finding. Recommendation: RBT recommends that the Town develop a closing checklist and timeline so that the books are closed and the audit completed in a timely manner. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2023-013 Procurement, Suspension and Debarment – Internal Control U.S. Department of Housing and Urban Development 21.027 – Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Condition: The Town did not have sufficient internal controls over debarment. Criteria: CSLFRF recipients are required under 48 CFR section 9.405-2(b) and the clause at 48 CFR section 52.209-6 to ensure federal funds are not used to pay contractors that are debarred. Cause: The Town did not have policies in place to review contractors for suspension and debarment. Effect: Debarment was not verified. Questioned Costs: None identified. Perspective: None of the transactions tested were with contractors that were suspended or debarred. Repeat Finding: Repeating of finding 2022-009. Recommendation: RBT recommends that the Town review its internal controls process for procurement and revise the procurement policy to include suspension and debarment procedures when spending federal funds. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2022-007 Reporting Type of Finding: Compliance Finding Condition: During review of the Housing Choice Voucher program, RBT noted that the Town did not submit timely GAAP-based unaudited and audited financial information to HUD after year end, within two and a half months for unaudited, and nine months for audited. Criteria: As a condition of receiving federal awards, the Town agrees to comply with laws, regulations, and the provisions of grant agreements and contracts, and to also maintain internal controls to provide reasonable assurance of compliance with these requirements. Cause: The Town did not have appropriate audit ready information/documentation in place in order for the unaudited FDS submission and audit to be conducted in a timely manner. Effect: Potential loss of funding due to noncompliance. Questioned Costs: None identified. Perspective: The unaudited information was submitted on September 20, 2023, and the audited information has not been submitted as of October 17, 2024. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends that the Town prepare all required information/documentation to ensure that the Authority can submit the unaudited and audited financial information to HUD timely. Auditee's Response: The Town agrees with this finding. See corrective action plan.

Finding 2022-008 Special Testing and Provisions: Depository Agreements 14.871 – Section 8 Housing Choice Vouchers Type of Finding: Compliance Finding Condition: During review of the Housing Choice Voucher (“HCV”) program, RBT noted that the Town did not have a depository agreement on file with its financial institution. Criteria: HCV recipients are required to enter into depository agreements with their financial institution using form HUD-51999 or a form required by HUD in the Annual Contribution Contract (“ACC”). The agreements serve as safeguards for Federal funds and provide third-party rights to HUD. Cause: The Town could not locate the agreement upon request. Effect: Lack of safeguards could put the Town’s assets at risk. Questioned Costs: None identified. Perspective: The Town’s HCV money is on deposit at one financial institution. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends that the Town have this agreement signed by the financial institution. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2022-009 Procurement, Suspension and Debarment 21.027 – Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Type of Finding: Significant Deficiency Condition: The Town did not have sufficient internal controls over debarment. Criteria: CSLFRF recipients are required to ensure federal funds are not used to pay contractors that are debarred. Cause: The Town did not have policies in place to review contractors for suspension and debarment. Effect: Debarment was not verified. Questioned Costs: None identified. Perspective: None of the transactions tested were with contractors that were suspended or debarred. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends that the Town review its internal controls process for procurement and revise the procurement policy to include suspension and debarment procedures when spending federal funds. Auditee’s Response: The Town agrees with this finding. See corrective action plan.

Finding 2022-010 Reporting 21.027 – Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Type of Finding: Compliance Finding Condition: The Town did not comply with the second annual Project and Expenditure report submission deadline. Criteria: Project and Expenditure reports must be submitted annually by April 30th. Cause: The Town did not have proper personnel set up as the authorized representative. Effect: The Project and Expenditures report was submitted late on May 18, 2023. Questioned Costs: None identified. Perspective: The Project and Expenditure filing occurs annually. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends that the Town ensure they have access for the authorized representative to submit the reports prior to the deadline. Auditee’s Response: See corrective action plan.

Finding 2022-011 Reporting 21.027 – Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Type of Finding: Compliance Finding Condition: The Town did not report an expenditure incurred during the year. Criteria: CSLFRF expenditure reporting requirements mandate that all CSLFRF funded expenditures be reported. Cause: The expense was overlooked. Effect: All CSLFRF expenditures were not reported. Questioned Costs: None identified. Perspective: One out of six expenditures tested were not reported. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends that the Town report all grant expenditures so that reporting is complete and accurate. Auditee’s Response: See corrective action plan.