SPIRIT LAKE HOUSING CORPORATIONTribal Government

2023-001: Delinquent Rent Receivables Criteria or Specific Requirement: Sound business practices require that all receivables are collected in a prompt and efficient manner to assure adequate operating funds are available to maintain the housing units in proper order. Condition: The Spirit Lake Housing Corporation does not have adequate policies in place to enforce rent collections. This resulted in excessive tenant accounts receivable at March 31, 2023. Questioned Costs: N/A Effect: The Spirit Lake Housing Corporation forfeits operating funds in material amounts that minimizes available monies for routine maintenance and repair and other common operating costs. The allowance for doubtful accounts as of March 31, 2023 was $1,683,655. Cause: The Spirit Lake Housing Corporation does not enforce its policies on delinquent tenants to ensure payment of rents earned. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: The Spirit Lake Housing Corporation needs to prioritize the enforcement of rent collection policies and establish payment plans for delinquent tenants. In many cases, payment plans can be established through payroll deduction with the tenants’ employers. Management Response and Corrective Action: The Spirit Lake Housing Corporation agrees with this finding and is working to improve upon and enforce the rent collection policies.

2023-002: Finding – Eligibility and Inspections Federal Program: Indian Housing Block Grant (including CARES) AL #14.867 Criteria: The Program requires the Corporation to develop written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant funds. Condition: During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-two files: 1) three files were missing their annual recertification documentation or was not signed by tenant or authority; 2) three files were missing a signed lease agreement; 3) one file was missing proof of tribal enrollment. Questioned Costs: Undeterminable Context: We tested 22 files out of a total of tenant population of 272. Effect: Non-compliance with eligibility requirements within the Corporation’s policies and NAHASDA regulations. Cause: Lack of controls and oversight during the year. Repeat Finding: This is a repeat finding of 2022-002. Recommendation: We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials: A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

Criteria or Specific Requirement: Sound business practices require that all receivables are collected in a prompt and efficient manner to assure adequate operating funds are available to maintain the housing units in proper order. Condition: The Spirit Lake Housing Corporation does not have adequate policies in place to enforce rent collections. This resulted in excessive tenant accounts receivable at March 31, 2022. Questioned Costs: N/A Effect: The Spirit Lake Housing Corporation forfeits operating funds in material amounts that minimizes available monies for routine maintenance and repair and other common operating costs. The allowance for doubtful accounts as of March 31, 2022 was $1,734,879. Cause: The Spirit Lake Housing Corporation does not enforce its policies on delinquent tenants to ensure payment of rents earned. Recommendation: The Spirit Lake Housing Corporation needs to prioritize the enforcement of rent collection policies and establish payment plans for delinquent tenants. In many cases, payment plans can be established through payroll deduction with the tenants? employers. Management Response and Corrective Action: The Spirit Lake Housing Corporation agrees with this finding and is working to improve upon and enforce the rent collection policies.

Federal Program: Indian Housing Block Grant (including CARES) AL #14.867 Criteria: The Program requires the Corporation to develop written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant funds. Condition: During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-five files: 1) four files were missing their annual recertification documentation or was not signed by tenant or authority; 2) five files did not have a current recertification or income verified annually; 3) two files were missing proof of tribal enrollment; 4) three files did not have an individual checklist available to verify whether applicable documents were received for the most recent application period. Questioned Costs: Undeterminable Context: We tested 25 files out of a total of tenant population of 272. Effect: Non-compliance with eligibility requirements within the Corporation?s policies and NAHASDA regulations. Cause: Lack of controls and oversight during the year. Repeat Finding: This is a repeat finding of 2021-004. Recommendation: We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials: A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

2021-004 Finding ? Eligibility and Inspections Federal Program Indian Housing Block Grant (including CARES) AL #14.867 ? Material Weakness Criteria The Program requires the Corporation to develop written policies governing the eligibility, admission and occupancy of families for housing assisted with grant funds. Condition During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-five files: 1) thirteen files were missing their annual recertification documentation or was not signed by tenant or authority; 2) twenty-three files tested were missing documentation of annual rent computation or was not signed by tenant or authority; 3) one file reviewed was missing a copy of their lease agreement; 4) fifteen files did not have a current recertification or income verified annually; 5) four files were missing proof of tribal enrollment; 6) eleven files did not have an individual checklist available to verify whether applicable documents were received for the most recent application period. Questioned Costs Undeterminable Context We tested 25 files out of a total of tenant population of 262. Effect Non-compliance with eligibility requirements within the Corporation?s policies and NAHASDA regulations. Cause Lack of controls and oversight during the year. Repeat Finding This is a repeat finding of 2020-006. Recommendation We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

Federal Program Indian Housing Block Grant (including CARES) AL #14.867 ? Material Weakness Criteria The Corporation is required to complete timely and accurate 425 reports as well as Annual Performance Reports. Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the 425 or Annual Performance Reports. In addition, the Annual Performance Reports were unable to be reconciled to general ledger information and the CARES ACT APR was not submitted timely. The IHBG second quarter 425 report was not submitted timely. Questioned Costs None Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual, properly supported, or submitted timely. Cause The Corporation underwent turnover and controls were not in place to ensure proper reporting. Repeat Finding This is a repeat finding of 2020-007. Recommendation We recommend that the Corporation implement policies and document procedures to ensure the Corporation?s compliance with reporting requirements. Views of Responsible Officials The Corporation will implement internal controls to ensure proper reporting.

2020-006 Finding ? Eligibility and Inspections Federal Program Indian Housing Block Grant CFDA #14.867 ? Material Weakness Criteria The Program requires the Corporation to develop written policies governing the eligibility, admission and occupancy of families for housing assisted with grant funds. Condition During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of forty files: 1) thirty-seven files were missing their annual recertification documentation or was not signed by tenant or authority; 2) thirty-seven files tested were missing documentation of annual rent computation or was not signed by tenant or authority; 3) nine files reviewed were missing a copy of their lease agreement; 4) thirty-seven files did not have a current recertification or income verified annually; 5) forty files did not have documentation of an inspection performed during the fiscal year; 6) seven files were missing proof of tribal enrollment; 7) nine files did not have an individual checklist available to verify whether applicable documents were received for the most recent application period; 8) four tenant files were not available to be reviewed. Questioned Costs Undeterminable Context We tested 40 files out of a total of tenant population greater than 250 selections. Effect Non-compliance with eligibility requirements within the Corporation?s policies and NAHASDA regulations. Cause Lack of controls and oversight during the year. Repeat Finding This is a repeat finding of 2019-007. Recommendation We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

2020-007 Finding ? Reporting Federal Program Indian Housing Block Grant CFDA #14.867 ? Material Weakness Criteria The Corporation is required to complete timely and accurate 425 reports as well as Annual Performance Reports. Condition During our testing of reporting, we noted that there were no processes in place that segregated duties of the individual preparing or submitting the 425 or Annual Performance Reports. In addition, the 425 and Annual Performance Reports were unable to be reconciled to general ledger information and were not submitted timely. Questioned Costs None Context During testing, we reviewed all required reports. Effect Information reported was not appropriately reviewed by an additional individual, properly supported, or submitted timely. Cause The Corporation underwent turnover and controls were not in place to ensure proper reporting. Repeat Finding This is a repeat finding of 2019-008. Recommendation We recommend that the Corporation implement policies and document procedures to ensure the Corporation?s compliance with reporting requirements. Views of Responsible Officials The Corporation will implement internal controls to ensure proper reporting.

2019-006 Finding ? Allowable Costs/Activities Allowed Federal Program Indian Housing Block Grant CFDA #14.867 ? Material Weakness Criteria The Corporation is required to pay employees based on their stated contracts/approved pay rates. Condition The Corporation gave bonus payments to employees that were unable to receive hourly wage increases. The payment was not approved by the Board. Questioned Costs $29,575 Context We noted during payroll testing that the Corporation had one extra payroll with large amounts to a few employees. Cause The Corporation?s board approved no payrate increases and management paid out the bonuses to make up for the difference. Effect Individuals receive wages in excess of approved maximums. Repeat Finding This is not a repeat finding. Recommendation The Corporation should implement policies to review all payroll transactions. Views of Responsible Officials The Executive Director will be responsible for adhering and enforcing the maximum wage policy. The funds covering these payments were not reimbursed by federal grant funds. The conditions that led to the payments will be investigated and recommendations for improvements to the wage policies will be provided by the consultant.

2019-007 Eligibility and Inspections Federal Program Indian Housing Block Grant CFDA #14.867 ? Material Weakness Criteria The Program requires the Corporation to develop written policies governing the eligibility, admission and occupancy of families for housing assisted with grant funds. Condition During our testing, we noted several instances of the Corporation not following their written policies. We noted the following during our testing selection of twenty-two files: 1) ten files tested were missing documentation of annual rent computation or was not signed by tenant or authority; 2) two files reviewed contained the annual rent computation but was unsigned by either the tenant or the executive director; 3) sixteen files did not have a current recertification or income verified annually; 4) twenty files did not have documentation of an inspection performed during the fiscal year; 5) four files reviewed were missing a copy of the lease agreement; 6) one file reviewed was missing a signed lease agreement; 7) three files were missing proof of tribal enrollment. Questioned Costs Undeterminable Context We tested 22 files out a total of 220. Effect Non-compliance with eligibility requirements and NAHASDA regulations. Cause Lack of controls and oversight during the year. Repeat Finding This is a repeat finding of 2018-004. Recommendation We recommend that the Corporation should implement internal controls to ensure all written policies are being implemented and followed. An example of a control would be a checklist that is included in the front of every file and includes all required forms of documentation. This checklist should be signed off on for each specific item as the requirements are met. Views of Responsible Officials A checklist has been compiled that will include required documentation, these are then periodically reviewed by staff for completeness.

2019-008 Reporting Federal Program Indian Housing Block Grant CFDA #14.867 ? Material Weakness Criteria The Corporation is required to complete timely and accurate 425 reports as well as Annual Performance Reports. Condition During our testing of reporting, we noted that the Corporation incorrectly filed the 425 reports by not reporting the amounts on a cumulative basis and program income was not properly reported. The Annual Performance Report was unable to be reconciled to general ledger information. Questioned Costs None Context During testing, we reviewed all required reports. Effect Information reported was not properly supported or incorrect. Cause The Corporation underwent turnover and controls were not in place to ensure proper reporting. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Corporation implement policies and document procedures to ensure the Corporation?s compliance with reporting requirements. Views of Responsible Officials The Corporation will implement internal controls to ensure proper reporting.

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