CENTERVILLE MUNICIPAL HOUSING AGENCYLocal Government

Finding 2020-004 Section 8 Housing Choice Voucher Program, CFDA 14.871 Material Weakness/Noncompliance Compliance Requirement ? Activities Allowed Criteria: According to 24 CFR sections 982.151 and 982.152 HAP funding can only be used to support the payment of HAP expenses. In addition, Section 15 of PIH Notice 2015-03, states that funds in the HAP RNP account and HUD-help program reserves shall only be used for eligible HAP needs. Condition: Because the operating losses of the Section 8 Program as detailed in Finding 2020-003, the Agency used HAP reserves to fund administrative deficits in the amount of $5,062. Cause: Management did not did not take proactive measures to reduce this in the prior year. Effect or Potential Effect: The Agency has borrowed $5,062 from HAP reserves to fund the deficit administrative equity. Recommendation: We recommend the Agency discuss this with HUD and to monitor the financial condition of the Voucher Program on a monthly bases and to keep the administrative costs within the parameter of the administrative fees earned from program activities.

Finding 2020-005 Capital Fund Grant Program, CFDA 14.872 Material Weakness/Noncompliance Compliance Requirement ? Cash Management Criteria ? According to HUD Cash Management Procedures contained in Notice 96-33, and later ratified indefinitely with Notice 2002-13, paragraph 6(a)(2), HUD has established the maximum time to be generally three working days in the time elapsing between the drawdown and disbursement of funds under Modernization Programs. Condition - During our audit we noted the Agency had requested funds for the 2018 Capital Fund Program but had not expended the funds within the three day time constraint as described above. On November 6, 2019 the Agency had received $158,074 for the full contract for elevator improvements but did not expend the money until March, April and May 2020. In addition, the Agency had paid $39,518.50 for the same elevator contract in the previous year, July 19, 2019 and had requisitioned funds from the 2017 grant instead. This resulted in an unearned revenue of $39,518.50 in the 2018 as of September 30, 2020. Cause - Management was unaware of the requirement. The Agency does not have adequate controls or procedures established to ensure that when funds are requisitioned the disbursement is made within the required time limit of three days. Effect or Potential Effect: Effect ? The Agency is in noncompliance with Cash Management Requirements of HUD. Recommendation ? We recommend the Agency review the procedures in place to ensure the funds requested from HUD are disbursed within the requirements established by HUD. In addition, the Agency should consider revising the 2018 to include the $39,518.50 to be used for operations in order to close the grant.

Finding 2020-006 Capital Fund Grant Program, CFDA 14.872 Material Weakness/Noncompliance Compliance Requirement ? Procurement Criteria ? The Agency is required to follow General Procurement Standards contained in 2CFR?200.318. The Agency has an established Procurement Policy which sets forth threshold and documentation requirements for management to follow to ensure that the Agency is in compliance with local as well as federal requirements. Condition - During our audit we noted Agency did not have any documentation to support that procurement procedures had been followed for the elevator improvement contract in the amount of $158,074. Cause ? Management stated to us that since this company was under an elevator maintenance contract that this company was perceived to do the work. Effect or Potential Effect: Effect ? The Agency is in noncompliance with procurement standards contained in 2CFR?200.318 and the Agency?s procurement policy as established by the Board of Commissioners. Recommendation - We recommend Management review the Federal procurement standards and the Agency?s procurement policy and to retain adequate documentation for each procurement in the future.

Finding 2020-007 Capital Fund Grant Program, CFDA 14.872 Material Weakness/Noncompliance Compliance Requirement ? Special Tests and Provisions Criteria: Wage Rate Requirements ? Projects funded with Capital Funds that are developed and/or modernized in accordance with 24 CFR part 905, subpart F, are subject to the Wage Rate Requirements (42 USC 1437j(a) and (b); 24 CFR ?905.308) Environmental Review ? An environmental review must be completed for any project or activities before a PHA may acquire, rehabilitate, convert, lease, repair or construct property. The environmental reviews are not tied to a specific grant but apply to all the operating and capital activities of the PHA for a five-year period. Condition: Wage Rate Requirements ? The Agency awarded an elevator contract in the amount of $158,074 for which the Agency did not monitor or implement the procedures for the Wage Rate Requirements. Environmental Review ? The Agency has not had an environmental review completed by a qualified contractor. Cause ? Management was unaware of the wage rate requirements and related to the environmental review, it was stated to us that Management was unsure who was qualified to do this until recently. Effect or Potential Effect: Effect ? The Agency is in noncompliance with Special Tests and Provisions as it relates to the above requirements detailed in the criteria section. Recommendation - We recommend Management review the compliance requirements of the Capital Grant Program to ensure procedures have been implemented in the future.