Fort Dodge Housing AgencyLocal Government

Finding 2023-002: Capital Fund Grant Cash Management Capital Funds – 14.872 Material Weakness/Noncompliance – Cash Management Criteria: The Agency is not allowed to pay for capital fund transactions until funds are vouchered and disbursed from LOCCS. Further, the funds must then be disbursed within 3 business days (3-day Treasury Rule) of the funds being deposited into the Agency’s bank account from LOCCS. Condition: They Agency had $481,645.23 of capital fund expenses during the year of which $118,732 were used for operations. Of the remaining $362,913 of expense, we tested $345,612.74 for compliance which included 27 transactions. Of the 27 transactions, we only noted 1 transaction for $107,301.78 where the funds were advanced and expended in accordance with the rules above. Cause: The Agency had adequate balances in its checking account where it was able to pay for the items without advancing the funds. Further, the responsibility for advancing the funds was the responsibility of one individual without proper oversight and due to time constraints, advancing funds in LOCCS was not prioritized. Effect or Potential Effect: The Agency did not comply with the cash management requirements. Recommendation: The Agency should establish procedures where capital funds are advanced when expenditures are to be made. The Agency should establish a system where the Executive Director can monitor the advances and related expenditure of the grant funds are occurring within the required timeframe. View of the Responsible Officials of the Auditee: The auditee's management agrees with the.

Finding 2022-002: Operating Subsidy Public Housing, 14.850 Material Weakness ?Special Tests and Provisions Criteria: The Agency is responsible for establishing an effective internal control process to ensure the Agency complies with the requirements governing the Public Housing program. Condition: During our audit, we noted the responsibility for the completion of UEL Formula, Form 52722 along with maintaining the supporting documentation was solely the responsibility of one individual without any type of review or oversight controls. Cause: The Agency had not adequately reviewed its internal control structure regarding the maintenance and reporting of utility expense and established effective controls to prevent errors or fraud. Effect or Potential Effect: The control deficiencies are deficiencies that result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected Recommendation: The Agency should review the deficiency and determine what controls should be implemented to ensure the accurate information is reported and supported for utility consumption and expenses for the purposes of reporting them on UEL Formula, From 52722. View of the Responsible Officials of the Auditee: The auditee's management agrees with the.

Noncompliance ? Allowable Costs Questioned Costs - $13,795.78 Criteria: The Agency is awarded an annual Capital Fund grant each year. The Agency prepares a five-year plan which indicates what each annual grant will be spent. This annual budget is modified upon the grant award to match the grant amount. Only items included within the budget are allowable costs. Further, HUD?s Capital Fund Guidebook states: ?Purchase or Leasing of Vehicles, subject to the restrictions identified in this section and 2 CFR Part 200. The purchase or leasing of new or replacement vehicles is an eligible cost where the vehicle is needed on a full-time basis to administer/implement the physical and Management Improvements set forth in the CFP Budget. Furthermore, in order to be an eligible cost under Management Improvements, the vehicle?s use must also be justified for a Public Housing Modernization or Development Project, or on a PHA-wide basis, as is needed to: (1) upgrade or improve the operation or maintenance of the Public Housing Projects, (2) promote energy improvements, (3) sustain the physical improvements, or (4) correct a management deficiency. [24 CFR ?905.200(b)(7)]? Condition: During the year ended June 30, 2020, the Agency purchased a maintenance pickup and charged $13,795.78 of that transaction to the 2019 Capital Fund grant. The pickup was not included in the approved 2019 Capital Fund budget and further did not meet the allowability criteria included in HUD?s Capital Fund Guidebook. Cause: The Agency did not adequately monitor its capital fund grant program to ensure expenditures were only for items included in an approved budget . Effect or Potential Effect: $13,795.78 of costs are being questioned as unallowable costs. Recommendation: The Agency should review the items with HUD and determine if they can do a budget revision to correct the error or what other action should be taken. For future grants, the Agency must ensure all work items are included in the budget prior to incurring the expense. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

GSA_MIGRATION