EIN: 560786993
UEI: DZP5A4WZ5MJ7
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 5, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 5, 2025 (265 days ago).
What is a management decision? →The Authority’s audited Financial Data Schedule (“FDS”) filing was not submitted within the timeframes specified by HUD. The FDS filing was due by June 30, 2024, but the financials were not issued until June 3, 2025. The Authority was also required to submit the OMB Data Collection Form to the Federal Audit Clearinghouse (“FAC”) by June 30, 2024, but was not filed timely as the audit was completed on June 3, 2025. Criteria: The Real Estate Assessment Center ("REAC") requires an accurate and timely submission of the audited FDS information. The OMB Data Collection Form is due to be electronically filed with the FAC at the completion of a Single Audit (but no later than 9 months after fiscal year end, unless extended). Questioned Costs: None. Effect: The Authority did not submit the audited FDS within the timeframe required by HUD, and therefore was noncompliant with this reporting requirement as well as the requirement to submit the OMB Data Collection Form within the required time frame. Failure to properly submit timely data could lead to significant issues including penalties and delays in funding. Cause: The audit delays and noncompliance stemmed from a combination of operational, leadership, and financial capacity challenges that significantly impacted the Authority’s ability to meet HUD’s reporting requirements. • Leadership Instability: For several years, the Authority lacked a permanent, full-time Chief Executive Officer (CEO), resulting in inconsistent oversight of daily operations and strategic financial management. This leadership gap contributed to delays in decision-making and hindered effective communication with auditors and HUD. • Financial Capacity Constraints: The Authority has faced persistent financial capacity challenges over the past two years. In April 2024, a new Chief Financial Officer (CFO) was hired; however, within the first two months, two Accounting Clerks resigned. All three staff members had limited experience navigating HUD systems and preparing the Financial Data Schedule (FDS), further straining the Authority’s ability to meet compliance deadlines. • Vendor and Software Disruptions: The previous administration’s decision to terminate the longstanding partnership with BDO PHA Finance and revert from Yardi to SACS software led to significant disruptions. BDO, a key financial partner, declined to continue services under the new software. During the transition, Yardi withheld access to financial data due to unpaid invoices, which delayed audit preparation, funding draws (CFP, Operating, FSS, ROSS), and updates to HUD systems, including EPIC and FDS. • Loss of Financial Records: In 2023, the Authority’s administrative building at 1000 Carthage Street, Sanford, NC, was vacated due to severe water damage from a leaking roof. The resulting mold and mildew rendered the building uninhabitable and destroyed critical financial records. At the time, the Authority did not utilize cloud-based storage or digital backups, which compounded the loss. Recommendation: The Authority should ensure that they retain support for all required documentation and that it is organized and readily accessible. Storing documents electronically with frequent backups would help prevent loss of data from damage to any one location. Furthermore, the Authority should ensure that staff receives necessary training for proper document retention. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
Show full finding ▾Hide full finding ▴2023-001 Reporting – Late REAC Submission and Late OMB Data Collection Form Submission Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 – Housing Choice Vouchers Material Weakness in Internal Control, Material Noncompliance Condition: The Authority’s audited Financial Data Schedule (“FDS”) filing was not submitted within the timeframes specified by HUD. The FDS filing was due by June 30, 2024, but the financials were not issued until June 3, 2025. The Authority was also required to submit the OMB Data Collection Form to the Federal Audit Clearinghouse (“FAC”) by June 30, 2024, but was not filed timely as the audit was completed on June 3, 2025. Criteria: The Real Estate Assessment Center ("REAC") requires an accurate and timely submission of the audited FDS information. The OMB Data Collection Form is due to be electronically filed with the FAC at the completion of a Single Audit (but no later than 9 months after fiscal year end, unless extended). Questioned Costs: None. Effect: The Authority did not submit the audited FDS within the timeframe required by HUD, and therefore was noncompliant with this reporting requirement as well as the requirement to submit the OMB Data Collection Form within the required time frame. Failure to properly submit timely data could lead to significant issues including penalties and delays in funding. Cause: The audit delays and noncompliance stemmed from a combination of operational, leadership, and financial capacity challenges that significantly impacted the Authority’s ability to meet HUD’s reporting requirements. • Leadership Instability: For several years, the Authority lacked a permanent, full-time Chief Executive Officer (CEO), resulting in inconsistent oversight of daily operations and strategic financial management. This leadership gap contributed to delays in decision-making and hindered effective communication with auditors and HUD. • Financial Capacity Constraints: The Authority has faced persistent financial capacity challenges over the past two years. In April 2024, a new Chief Financial Officer (CFO) was hired; however, within the first two months, two Accounting Clerks resigned. All three staff members had limited experience navigating HUD systems and preparing the Financial Data Schedule (FDS), further straining the Authority’s ability to meet compliance deadlines. • Vendor and Software Disruptions: The previous administration’s decision to terminate the longstanding partnership with BDO PHA Finance and revert from Yardi to SACS software led to significant disruptions. BDO, a key financial partner, declined to continue services under the new software. During the transition, Yardi withheld access to financial data due to unpaid invoices, which delayed audit preparation, funding draws (CFP, Operating, FSS, ROSS), and updates to HUD systems, including EPIC and FDS. • Loss of Financial Records: In 2023, the Authority’s administrative building at 1000 Carthage Street, Sanford, NC, was vacated due to severe water damage from a leaking roof. The resulting mold and mildew rendered the building uninhabitable and destroyed critical financial records. At the time, the Authority did not utilize cloud-based storage or digital backups, which compounded the loss. Recommendation: The Authority should ensure that they retain support for all required documentation and that it is organized and readily accessible. Storing documents electronically with frequent backups would help prevent loss of data from damage to any one location. Furthermore, the Authority should ensure that staff receives necessary training for proper document retention. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
2023-001 Reporting – Late REAC Submission and Late OMB Data Collection Form Submission Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 – Housing Choice Vouchers Material Weakness in Internal Control, Material Noncompliance Condition: The Authority’s audited Financial Data Schedule (“FDS”) filing was not submitted within the timeframes specified by HUD. The FDS filing was due by June 30, 2024, but the financials were not issued until June 3, 2025. The Authority was also required to submit the OMB Data Collection Form to the Federal Audit Clearinghouse (“FAC”) by June 30, 2024, but was not filed timely as the audit was completed on June 3, 2025. Recommendation: The Authority should ensure that they retain support for all required documentation and that it is organized and readily accessible. Storing documents electronically with frequent backups would help prevent loss of data from damage to any one location. Furthermore, the Authority should ensure that staff receives necessary training for proper document retention. Action Taken: To address the identified deficiencies and restore compliance with HUD requirements and the Trouble Recovery Agreement, the Authority will implement the following corrective actions: 1. Leadership and Governance Stabilization: Ensure that the new CEO is briefed on all relevant programs, financial updates, management, and strategic planning initiatives. Ensure that the Finance Committee, within the Board of Commissioners, continues to hold monthly meetings before all regular board meetings and monitors financial reporting, budget adherence, and audit readiness. Ensure that the Administrative Plan for the HCV Program is comprehensively updated to reflect current HUD regulations and strategies for program optimization. 2. Financial Staffing and Capacity Building: Maintain continuity in financial leadership by supporting the Interim CFO and ensuring adequate staffing, such as the new Staff Accountant in the Finance Department, to support audit preparation and HUD reporting. Develop a financial onboarding and training program for all new finance staff, with a focus on HUD systems (FDS, VMS, EPIC, LOCCS) and internal budget protocols. Ensure that Program and Finance Management staff of the HCV Program attend the HCV Financial Management and HCV Financial Accounting and Reporting sessions. 3. Budget Training and Accountability: Implement mandatory budget training for the Finance Department and the HCV Program Department, covering: Budget development and forecasting; Budget-to-actual variance analysis; HUD funding streams and eligible uses; Internal budget controls and documentation standards; Voucher Management System, FDS policies, and SOPs. Create an Accountability Chart for the Program and Financial Management of the HCV Program, outlining roles, responsibilities, and procedures for budget planning, monitoring, and reporting. Require monthly or biweekly meetings with budget reviews by department heads and mid-level managers, with variance explanations submitted to the CFO and CEO, and shared with the Board. 4. Fee Accountant Reinstatement and Optimize HCV Program Finances: Reinstate and formalize the partnership with BDO PHA Finance to support audit preparation, financial reporting, and staff training. Establish financial performance tracking, standard operating procedures (SOPs), contract compliance monitoring, and payment authorization protocols. 5. Technology and Data Management Improvements: Prepare the Chart of Accounts, Procure to Pay, and Voucher Management System (VMS), as well as the Two-Year Tool (TYT), and take other necessary financial steps to ensure a seamless transition from SACS to Reframe. Implement cloud-based storage and digital backup protocols to safeguard financial records and ensure continuity in the event of future disruptions. Establish a centralized digital archive for all financial documents, including budgets, invoices, contracts, and audit work papers. 6. Audit Readiness and Compliance Monitoring: Create an annual audit preparation calendar with clear deadlines for data collection, reconciliations, and internal reviews. Conduct monthly and quarterly internal audits to assess financial controls, procurement compliance, and budget adherence. Submit monthly and quarterly progress reports to HUD and the Board as part of the Troubled Recovery Agreement and internal HUD Recovery Strategic Plan, documenting improvements in financial management and audit readiness. 7. Transparency and Communication: Present monthly financial reports to the Board of Commissioners, including budget-to-actual comparisons and audit status updates. Publish an annual financial summary on the Authority’s website to promote transparency and public accountability
The Authority did not have adequate controls over compliance with federal regulations regarding procurement. During the audit period, Authority paid amounts to a contractor for unit turnover and renovation totaling $121,125 without documenting that it had properly procured these services. Criteria: Federal regulations (2 CFR 200.320) provide the methods of procurement to be followed when acquiring goods or services. Specifically, quotations must be obtained from an adequate number of qualified sources when procuring goods or services that exceed the micro-purchase amount and sealed bids are required when the goods or services to be procured exceed the simplified acquisition threshold of $250,000. Questioned Costs: $121,125. Effect: The Authority expended public housing capital fund monies for services without following proper federal procurement standards. Cause: The Authority was unable to provide the required procurement documentation due to the following factors: • Operational Disruptions: The relocation of the administrative office disrupted access to essential records. In addition, significant turnover in key management and procurement staff during the audit period contributed to lapses in procurement oversight and documentation. • Performance and Compliance Issues: The Authority failed its 2022 Public Housing Assessment System (PHAS) review, resulting in a “Troubled Agency” designation and a score of 5 out of 10 for the Capital Fund Program (CFP). Despite commitments made in its October 27, 2023, response to HUD and its Troubled Recovery Plan, the Authority did not follow through on key corrective actions, including: Engaging with high-performing PHAs for peer-to-peer training; training staff on procurement practices; obtaining a list of contractors from the state; and acquiring a procurement policy from a high-performing PHA. • Lack of Internal Controls, Training, and Budget Awareness: The Authority lacked adequate checks and balances across departments. Staff in finance, executive leadership, asset management, and other key areas did not demonstrate a basic understanding of procurement, contract management, or budgetary principles. Asset management staff frequently procured goods and services without understanding or adhering to procurement regulations, internal policies, or budget constraints. There was a general lack of awareness and accountability regarding budget planning, monitoring, and adherence, leading to overspending, misallocation of funds, and insufficient documentation of financial decisions. • Procurement Irregularities: The Authority routinely solicited quotes only from familiar vendors, rather than conducting open and competitive sourcing. Vendors with a history of substandard performance were allowed to continue working, often requiring repeated corrective actions and causing project delays. Some vendors were restricted from working at specific developments but continued to operate at others. Certain vendors bypassed standard payment protocols by seeking direct authorization from senior leadership, undermining financial governance. Recommendation: Authority personnel responsible for acquiring goods and services should receive additional training regarding the federal standards for procurement. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
Show full finding ▾Hide full finding ▴2023-002 Procurement and Suspension and Debarment – Proper Documentation 14.872 Public Housing Capital Fund Material Weakness in Internal Control, Material Noncompliance Condition: The Authority did not have adequate controls over compliance with federal regulations regarding procurement. During the audit period, Authority paid amounts to a contractor for unit turnover and renovation totaling $121,125 without documenting that it had properly procured these services. Criteria: Federal regulations (2 CFR 200.320) provide the methods of procurement to be followed when acquiring goods or services. Specifically, quotations must be obtained from an adequate number of qualified sources when procuring goods or services that exceed the micro-purchase amount and sealed bids are required when the goods or services to be procured exceed the simplified acquisition threshold of $250,000. Questioned Costs: $121,125. Effect: The Authority expended public housing capital fund monies for services without following proper federal procurement standards. Cause: The Authority was unable to provide the required procurement documentation due to the following factors: • Operational Disruptions: The relocation of the administrative office disrupted access to essential records. In addition, significant turnover in key management and procurement staff during the audit period contributed to lapses in procurement oversight and documentation. • Performance and Compliance Issues: The Authority failed its 2022 Public Housing Assessment System (PHAS) review, resulting in a “Troubled Agency” designation and a score of 5 out of 10 for the Capital Fund Program (CFP). Despite commitments made in its October 27, 2023, response to HUD and its Troubled Recovery Plan, the Authority did not follow through on key corrective actions, including: Engaging with high-performing PHAs for peer-to-peer training; training staff on procurement practices; obtaining a list of contractors from the state; and acquiring a procurement policy from a high-performing PHA. • Lack of Internal Controls, Training, and Budget Awareness: The Authority lacked adequate checks and balances across departments. Staff in finance, executive leadership, asset management, and other key areas did not demonstrate a basic understanding of procurement, contract management, or budgetary principles. Asset management staff frequently procured goods and services without understanding or adhering to procurement regulations, internal policies, or budget constraints. There was a general lack of awareness and accountability regarding budget planning, monitoring, and adherence, leading to overspending, misallocation of funds, and insufficient documentation of financial decisions. • Procurement Irregularities: The Authority routinely solicited quotes only from familiar vendors, rather than conducting open and competitive sourcing. Vendors with a history of substandard performance were allowed to continue working, often requiring repeated corrective actions and causing project delays. Some vendors were restricted from working at specific developments but continued to operate at others. Certain vendors bypassed standard payment protocols by seeking direct authorization from senior leadership, undermining financial governance. Recommendation: Authority personnel responsible for acquiring goods and services should receive additional training regarding the federal standards for procurement. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
2023-002 Procurement and Suspension and Debarment – Proper Documentation 14.872 Public Housing Capital Fund Material Weakness in Internal Control, Material Noncompliance Condition: The Authority did not have adequate controls over compliance with federal regulations regarding procurement. During the audit period, Authority paid amounts to a contractor for unit turnover and renovation totaling $121,125 without documenting that it had properly procured these services. Recommendation: Authority personnel responsible for acquiring goods and services should receive additional training regarding the federal standards for procurement. Action Taken: To address the identified deficiencies and restore compliance, the Authority will implement the following corrective actions: 1. Training and Capacity Building: Provide comprehensive online and in-person training on procurement, contract management, and budget accountability for all relevant staff. Train management staff on participating in procurement selection committees and evaluating Requests for Proposals (RFPs), Requests for Quotations (RFQs), and Invitations for Bids (IFBs). Include budget literacy and financial planning modules in all staff training programs to ensure understanding of budget development, monitoring, and compliance. 2. Third-Party Assessment and Policy Updates: Engage a third-party firm to assess procurement, contract management, and budget oversight operations. Revise the current procurement policy, standard operating procedures (SOPs), and budget management protocols to ensure alignment with best practices. Update internal controls and financial policies to ensure alignment with HUD regulations and best practices. 3. Process Improvement and Technology Integration: Develop a process map based on assessment findings to streamline procurement and budget workflows, thereby reducing risk. Implement an affordable, user-friendly eProcurement software solution tailored to the affordable housing sector. Evaluate the need for a dedicated staff member to manage the eProcurement system, including vendor management, proposal evaluation, contract oversight, reporting, and system integration. 4. Transparency and Outreach: Create and maintain a procurement page on both the current and new Authority websites. Publicize procurement opportunities through social media and other outreach channels. Publish budget summaries and procurement plans to promote transparency and stakeholder confidence. 5. Governance and Accountability: Ensure all relevant staff, including finance, executive leadership, asset management, and others, are trained in procurement, contract management, and budget accountability. Reinforce best practices by designating the Chief Executive Officer as the sole Contracting Officer authorized to enter into agreements on behalf of the Authority. Establish regular internal audits and budget reviews to monitor compliance and performance.
Only one contract funded by the Capital Fund Program was awarded during the audit period above the small purchase threshold. The contract did not contain the required wage rate clause, and the Authority was not able to provide documentation showing that the contractor had submitted the required certified payrolls. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Questioned Costs: None. Effect: The Authority is not in compliance with applicable HUD regulations. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal wage rate requirements, particularly under the Davis-Bacon Act. Specific deficiencies included: • Documentation Deficiencies: The Authority failed to maintain accurate or complete certified payroll records required for Davis-Bacon compliance. Supporting documentation, such as wage interviews, contractor certifications, and labor classifications, was either missing or incomplete. There was no formal process in place to verify or monitor contractor compliance with prevailing wage requirements. • Lack of Staff Knowledge and Oversight: Staff lacked sufficient training on Davis-Bacon requirements and did not consistently enforce wage rate compliance during procurement and contract administration. Internal controls were not designed to detect or prevent noncompliance with federal labor standards. Recommendation: We recommend that the Authority ensure the required wage rate clause is included in all contracts above $2,000 and that certified payrolls are being submitted and documentation retained. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff to ensure they are in compliance with HUD requirements.
Show full finding ▾Hide full finding ▴2023-003 Special Tests and Provisions – Wage Rate Requirements 14.872 Public Housing Capital Fund Material Weakness in Internal Control, Material Noncompliance Condition: Only one contract funded by the Capital Fund Program was awarded during the audit period above the small purchase threshold. The contract did not contain the required wage rate clause, and the Authority was not able to provide documentation showing that the contractor had submitted the required certified payrolls. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Questioned Costs: None. Effect: The Authority is not in compliance with applicable HUD regulations. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal wage rate requirements, particularly under the Davis-Bacon Act. Specific deficiencies included: • Documentation Deficiencies: The Authority failed to maintain accurate or complete certified payroll records required for Davis-Bacon compliance. Supporting documentation, such as wage interviews, contractor certifications, and labor classifications, was either missing or incomplete. There was no formal process in place to verify or monitor contractor compliance with prevailing wage requirements. • Lack of Staff Knowledge and Oversight: Staff lacked sufficient training on Davis-Bacon requirements and did not consistently enforce wage rate compliance during procurement and contract administration. Internal controls were not designed to detect or prevent noncompliance with federal labor standards. Recommendation: We recommend that the Authority ensure the required wage rate clause is included in all contracts above $2,000 and that certified payrolls are being submitted and documentation retained. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff to ensure they are in compliance with HUD requirements.
2023-003 Special Tests and Provisions – Wage Rate Requirements 14.872 Public Housing Capital Fund Material Weakness in Internal Control, Material Noncompliance Condition: Only one contract funded by the Capital Fund Program was awarded during the audit period above the small purchase threshold. The contract did not contain the required wage rate clause, and the Authority was not able to provide documentation showing that the contractor had submitted the required certified payrolls. Recommendation: We recommend that the Authority ensure the required wage rate clause is included in all contracts above $2,000 and that certified payrolls are being submitted and documentation retained. Action Taken: To address these deficiencies, the Authority will implement the following corrective action: 1. Staff Training: Provide targeted training for procurement, contract management, and asset management staff on Davis-Bacon wage requirements, certified payroll review, and labor compliance monitoring. Incorporate Davis-Bacon compliance into the Authority’s procurement and contract management SOPs. 2. Vendor Compliance Monitoring: Require all contractors and subcontractors to submit certified payrolls electronically. Establish a formal review process to verify wage classifications, hours worked, and compliance with prevailing wage rates. Conduct periodic wage interviews and maintain documentation in accordance with HUD and Department of Labor guidelines. 3. Payroll Analysis and Internal Controls: Assign a designated compliance officer or staff member to oversee wage rate compliance and maintain a centralized log of all Davis-Bacon projects. Implement a checklist and audit trail for each project to ensure all required documentation is collected and reviewed prior to payment authorization.
The Authority has loaned monies from the Public and Indian Housing Program to the COCC. As of September 30, 2023 these loans totaled $349,352. Criteria: The Public Housing Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Inappropriate use of funds, even a temporary loan, are ineligible costs resulting in non-compliance. The AMPs, under current laws, cannot loan the COCC any funds. Questioned Costs: $349,352. Effect: The Authority is not in compliance with applicable HUD regulations regarding eligible use of federal funds. Cause: The Central Office Cost Center (COCC) borrowed funds to offset operating losses, primarily due to financial mismanagement and structural weaknesses in budget planning and oversight. Contributing factors included: • Financial Mismanagement of LIHTC Property: The Authority attempted to cover operating losses at the underperforming Matthews Garden Gilmore (MGG) development, a troubled RAD PBV LIHTC project. The development suffered from low lease-up rates, debt obligations, and poor financial planning. The agency left the utility bills and other day-to-day management services in the Authority’s name instead of transferring them to the nonprofit instrumentality, the Central Carolina Strategic Developers. • Lack of Budget Accountability: The Authority did not operate with an accurate, balanced budget for the COCC or the MGG development. Budget assumptions failed to account for the complexities of managing RAD PBV and LIHTC properties, including layered compliance and funding restrictions. • Insufficient Financial Capacity: The Authority lacked the financial infrastructure and expertise to manage a multifaceted PHA portfolio, including RAD, LIHTC, and traditional public housing programs. Staff turnover and limited experience further weakened financial oversight. • Improper Salary Allocations: Salaries and day-to-day operational spending were not allocated adequately across departments and programs, contributing to COCC operating losses and noncompliance with HUD cost allocation requirements. Recommendation: The Authority should develop a plan based on budgeting and monitoring of COCC expenses to have the ability to reimburse funds to the Public and Indian Housing Program. Views of Responsible Officials of the Auditee: We concur with the recommendation and are formulating a plan to repay these funds.
Show full finding ▾Hide full finding ▴2023-004 Activities Allowed or Unallowed – Interprogram Activity Public and Indian Housing – CFDA Number 14.850 Other Matters, Questioned Costs Condition: The Authority has loaned monies from the Public and Indian Housing Program to the COCC. As of September 30, 2023 these loans totaled $349,352. Criteria: The Public Housing Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Inappropriate use of funds, even a temporary loan, are ineligible costs resulting in non-compliance. The AMPs, under current laws, cannot loan the COCC any funds. Questioned Costs: $349,352. Effect: The Authority is not in compliance with applicable HUD regulations regarding eligible use of federal funds. Cause: The Central Office Cost Center (COCC) borrowed funds to offset operating losses, primarily due to financial mismanagement and structural weaknesses in budget planning and oversight. Contributing factors included: • Financial Mismanagement of LIHTC Property: The Authority attempted to cover operating losses at the underperforming Matthews Garden Gilmore (MGG) development, a troubled RAD PBV LIHTC project. The development suffered from low lease-up rates, debt obligations, and poor financial planning. The agency left the utility bills and other day-to-day management services in the Authority’s name instead of transferring them to the nonprofit instrumentality, the Central Carolina Strategic Developers. • Lack of Budget Accountability: The Authority did not operate with an accurate, balanced budget for the COCC or the MGG development. Budget assumptions failed to account for the complexities of managing RAD PBV and LIHTC properties, including layered compliance and funding restrictions. • Insufficient Financial Capacity: The Authority lacked the financial infrastructure and expertise to manage a multifaceted PHA portfolio, including RAD, LIHTC, and traditional public housing programs. Staff turnover and limited experience further weakened financial oversight. • Improper Salary Allocations: Salaries and day-to-day operational spending were not allocated adequately across departments and programs, contributing to COCC operating losses and noncompliance with HUD cost allocation requirements. Recommendation: The Authority should develop a plan based on budgeting and monitoring of COCC expenses to have the ability to reimburse funds to the Public and Indian Housing Program. Views of Responsible Officials of the Auditee: We concur with the recommendation and are formulating a plan to repay these funds.
2023-004 Activities Allowed or Unallowed – Interprogram Activity Public and Indian Housing – CFDA Number 14.850 Other Matters, Questioned Costs Condition: The Authority has loaned monies from the Public and Indian Housing Program to the COCC. As of September 30, 2023 these loans totaled $349,352. Recommendation: The Authority should develop a plan based on budgeting and monitoring of COCC expenses to have the ability to reimburse funds to the Public and Indian Housing Program. Action Taken: To restore financial integrity and ensure proper use of COCC funds, the Authority will take the following actions: 1. COCC Optimization and Budget Reform: Develop and implement a proper, balanced COCC budget that reflects actual operating costs and allocates shared services appropriately. Establish budget accountability protocols, including monthly budget-to-actual reviews and variance reporting to the CFO, CEO, and Board. 2. Training and Capacity Building: Provide training for finance staff on COCC operations, HUD’s Asset Management model, and best practices for cost allocation and shared services. Engage external consultants to support financial modeling and long-term sustainability planning for RAD and LIHTC properties. 3. Shared Services Agreement: Formalize a Consulting and Shared Services Agreement to ensure that COCC services are appropriately billed and reimbursed by other programs. Monitor inter-program transactions to ensure compliance with HUD’s financial management requirements. 4. Salary Allocation and Cost Tracking: Conduct a salary allocation study to ensure that staff time is distributed adequately across programs. Implement time-tracking tools and cost allocation methodologies that align with HUD guidance and OMB Uniform Guidance. Effective Date: June 3, 2025 Contact Information Dr. Michael C. Threatt, Chief Executive Officer Sanford Housing Authority 317 Chatham Street Sanford, North Carolina 27330 (919) 776-7655
FAC accepted this audit on June 25, 2023 — management decision was due December 25, 2023.
Out of a total tenant population of approximately 573 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file that did not contain a 214 affidavit for one member of the household, however they did have a birth certificate showing they were an eligible citizen. ? 2 files where the 214 affidavit was not checked for one member of the household certifying they were an eligible citizen, however they did have birth certificates to verify their citizenship. ? 5 files that did not contain a signed Form 9886 for at least one member of the household age 18 or over. ? 1 file where the tenant?s income was calculated correctly but had the wrong amount reported on the 50058, which would have decreased HAP rent by $11. ? 1 file where the prior year utility allowance schedule was used instead of the current year, however this had no effect on HAP rent. ? 1 file where there was no support that an inspection had been done for a new admission. ? 1 file that did not contain a tenancy addendum to support the contract rent and HAP rent for a tenant with a project-based voucher. ? 2 files where there was no support that an EIV report had been processed. In addition to the above, we noted the following during our new admissions testing (9 new admissions tested): ? 3 files that did not contain a passed inspection completed prior to move-in. ? 1 file that did not contain a signed lease agreement or tenancy addendum. ? 1 file where the request for tenancy approval was not executed until the day after the voucher had expired. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as maintain complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payments to landlords. Cause: Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
Show full finding ▾Hide full finding ▴2022-001 Eligibility ? Tenant Files Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 ? Housing Choice Vouchers 14.879 Mainstream Vouchers Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2021-002 from the prior year September 30, 2021 Condition: Out of a total tenant population of approximately 573 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file that did not contain a 214 affidavit for one member of the household, however they did have a birth certificate showing they were an eligible citizen. ? 2 files where the 214 affidavit was not checked for one member of the household certifying they were an eligible citizen, however they did have birth certificates to verify their citizenship. ? 5 files that did not contain a signed Form 9886 for at least one member of the household age 18 or over. ? 1 file where the tenant?s income was calculated correctly but had the wrong amount reported on the 50058, which would have decreased HAP rent by $11. ? 1 file where the prior year utility allowance schedule was used instead of the current year, however this had no effect on HAP rent. ? 1 file where there was no support that an inspection had been done for a new admission. ? 1 file that did not contain a tenancy addendum to support the contract rent and HAP rent for a tenant with a project-based voucher. ? 2 files where there was no support that an EIV report had been processed. In addition to the above, we noted the following during our new admissions testing (9 new admissions tested): ? 3 files that did not contain a passed inspection completed prior to move-in. ? 1 file that did not contain a signed lease agreement or tenancy addendum. ? 1 file where the request for tenancy approval was not executed until the day after the voucher had expired. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as maintain complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payments to landlords. Cause: Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
2022-001 Eligibility ? Tenant Files Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 ? Housing Choice Vouchers 14.879 Mainstream Vouchers Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2021-002 from the prior year September 30, 2021 Condition: Out of a total tenant population of approximately 573 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file that did not contain a 214 affidavit for one member of the household, however they did have a birth certificate showing they were an eligible citizen. ? 2 files where the 214 affidavit was not checked for one member of the household certifying they were an eligible citizen, however they did have birth certificates to verify their citizenship. ? 5 files that did not contain a signed Form 9886 for at least one member of the household age 18 or over. ? 1 file where the tenant?s income was calculated correctly but had the wrong amount reported on the 50058, which would have decreased HAP rent by $11. ? 1 file where the prior year utility allowance schedule was used instead of the current year, however this had no effect on HAP rent. ? 1 file where there was no support that an inspection had been done for a new admission. ? 1 file that did not contain a tenancy addendum to support the contract rent and HAP rent for a tenant with a project-based voucher. ? 2 files where there was no support that an EIV report had been processed. In addition to the above, we noted the following during our new admissions testing ( new admissions tested): ? 3 files that did not contain a passed inspection completed prior to move-in. ? 1 file that did not contain a signed lease agreement or tenancy addendum. ? 1 file where the request for tenancy approval was not executed until the day after the voucher had expired. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: Errors were corrected in the tested files where corrections could be made. Meaning for example Form 9886 cannot be regenerated for this audit period but will be obtained during future annual recertification (also known as the personal declaration/application) periods. Adjustments will be made to the tenant accounts. Staff was informed to obtain Form 214 during all recertification re-examinations to ensure the required form is in the file. This way, if it was never obtained or if it was inadvertently purged, the file will always have a copy in the file for the review period. File Audit: A file audit (not a 100% audit) was completed for the Housing Choice Voucher Program. A procured third-party vendor performed this process. However, previous staff members did not make the file corrections. For months, there was only one staff member in the HCV Department. The department, at this time, is fully staffed. The current staff is making the file corrections as they come across various issues while moving the program/department forward. Of importance to note is the hire of a new Chief Operating Officer with over twenty (20) plus years of HCV experience who will oversee the Section 8 Department. We believe the new leadership, to include CEO and COO positions will provide the necessary oversight of the HCV program that will improve the overall performance of staff and the program. Quality Control Review: After completion of the file audit, the Housing Choice Voucher Program Manager and their supervisor will be responsible for documented monthly quality control reviews of 10% of files completed during the month. Effective Date: June 22, 2023 Contact Information Marcus Goodson, Interim Executive Director Sanford Housing Authority 1000 Carthage Street Sanford, North Carolina 27330 (919) 776-7655
2021-002
FAC accepted this audit on June 26, 2022 — management decision was due December 26, 2022.
Out of a total tenant population of approximately 254 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where tenant social security income was calculated differently than the support in the file, which resulted in an overpayment of rent by $1. ? 1 file where there was no support for the $480 deduction for full-time students, which resulted in an underpayment of rent by $11. ? 1 file where the signed personal declaration/application and signed Form 9886 was not present. ? 1 file where tenant wage income was calculated incorrectly by not using the gross amount on the paystubs, which resulted in an underpayment of rent by $7. ? 1 file where there was no support for $2,146 of non-wage income, however this had no effect on the rent. ? 1 file where there was no support for $4,092 in unreimbursed medical expenses, which resulted in an underpayment of rent by $88. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file where the lease agreement was not signed by either party. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
Show full finding ▾Hide full finding ▴2021-001 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Significant deficiency in Internal Control, Other matters Repeat finding of finding 2020-001 from the prior year September 30, 2020 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 254 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where tenant social security income was calculated differently than the support in the file, which resulted in an overpayment of rent by $1. ? 1 file where there was no support for the $480 deduction for full-time students, which resulted in an underpayment of rent by $11. ? 1 file where the signed personal declaration/application and signed Form 9886 was not present. ? 1 file where tenant wage income was calculated incorrectly by not using the gross amount on the paystubs, which resulted in an underpayment of rent by $7. ? 1 file where there was no support for $2,146 of non-wage income, however this had no effect on the rent. ? 1 file where there was no support for $4,092 in unreimbursed medical expenses, which resulted in an underpayment of rent by $88. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file where the lease agreement was not signed by either party. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
2021-001 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Significant deficiency in Internal Control, Other matters Repeat finding of finding 2020-001 from the prior year September 30, 2020 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 254 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where tenant social security income was calculated differently than the support in the file, which resulted in an overpayment of rent by $1. ? 1 file where there was no support for the $480 deduction for full-time students, which resulted in an underpayment of rent by $11. ? 1 file where the signed personal declaration/application and signed Form 9886 was not present. ? 1 file where tenant wage income was calculated incorrectly by not using the gross amount on the paystubs, which resulted in an underpayment of rent by $7. ? 1 file where there was no support for $2,146 of non-wage income, however this had no effect on the rent. ? 1 file where there was no support for $4,092 in unreimbursed medical expenses, which resulted in an underpayment of rent by $88. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file where the lease agreement was not signed by either party. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: Errors were corrected in the tested files where corrections could be made. Meaning, for example, that Form 9886 cannot be regenerated for this audit period but will be obtained during future annual recertification (also known as the personal declaration/application) periods. Adjustments were made to the tenant accounts. Regarding the missing documents, the standard operating procedures were implemented in 2021, and a checklist was created to ensure that all required documents for all household members are present in the files. The property management team was trained (by the CEO) over a two-day period on the standard operating procedures. The standard operating procedures were placed in binders and provided to the property management teams. However, staff must use the tools/resources that were provided to them. Quality Control Review: The Property Manager and Director of Operations are responsible for documented monthly quality control reviews of 10% of files completed during the month.
2020-001
Out of a total tenant population of approximately 587 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 files that did not contain 214 affidavits for at least one member of the household, however, they did have birth certificates showing all were eligible citizens. ? 1 file where there was no support for $480 deduction for full-time students, however this had no effect on HAP rent. ? 1 file that did not contain a lease agreement, only a signed note from landlord authorizing tenant to move into the unit. ? 1 file where the lead paint notice was not signed by the tenant. ? 1 file where rent was reported $15 lower on the 50058 than the lease addendum and rent register, however this had no effect on HAP rent. ? 1 file where there was no reasonable rent documentation, however there was documentation from the initial move-in that showed comparable rents higher than the current amount. ? 1 file that did not contain a HAP contract. ? 1 file that had support showing the tenant earned $300 per month in unemployment income that was not reported on the 50058. This had no effect on the HAP rent. ? 1 file where the utility allowance was calculated using incorrect amounts from the utility allowance schedule, and should have been $38 lower. This had no effect on the HAP rent. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file that did not contain a HAP contract ? 1 file that did not contain a 214 affidavit or birth certificate for a member of the household ? 1 file where the Request for Tenancy form was signed but not dated by either party. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as maintain complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payments to landlords. Cause: Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
Show full finding ▾Hide full finding ▴2021-002 Eligibility ? Tenant Files Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 ? Housing Choice Vouchers 14.879 Mainstream Vouchers Material Weakness in Internal Control, Material Noncompliance Condition: Out of a total tenant population of approximately 587 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 files that did not contain 214 affidavits for at least one member of the household, however, they did have birth certificates showing all were eligible citizens. ? 1 file where there was no support for $480 deduction for full-time students, however this had no effect on HAP rent. ? 1 file that did not contain a lease agreement, only a signed note from landlord authorizing tenant to move into the unit. ? 1 file where the lead paint notice was not signed by the tenant. ? 1 file where rent was reported $15 lower on the 50058 than the lease addendum and rent register, however this had no effect on HAP rent. ? 1 file where there was no reasonable rent documentation, however there was documentation from the initial move-in that showed comparable rents higher than the current amount. ? 1 file that did not contain a HAP contract. ? 1 file that had support showing the tenant earned $300 per month in unemployment income that was not reported on the 50058. This had no effect on the HAP rent. ? 1 file where the utility allowance was calculated using incorrect amounts from the utility allowance schedule, and should have been $38 lower. This had no effect on the HAP rent. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file that did not contain a HAP contract ? 1 file that did not contain a 214 affidavit or birth certificate for a member of the household ? 1 file where the Request for Tenancy form was signed but not dated by either party. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as maintain complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payments to landlords. Cause: Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority concurs with this finding and will implement review procedures and provide ongoing training to staff.
2021-002 Eligibility ? Tenant Files Section 8 Housing Voucher Cluster (Section 8): 14.871 Section 8 ? Housing Choice Vouchers 14.879 Mainstream Vouchers Material Weakness in Internal Control, Material Noncompliance Condition: Out of a total tenant population of approximately 587 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 files that did not contain 214 affidavits for at least one member of the household, however, they did have birth certificates showing all were eligible citizens. ? 1 file where there was no support for $480 deduction for full-time students, however this had no effect on HAP rent. ? 1 file that did not contain a lease agreement, only a signed note from landlord authorizing tenant to move into the unit. ? 1 file where the lead paint notice was not signed by the tenant. ? 1 file where rent was reported $15 lower on the 50058 than the lease addendum and rent register, however this had no effect on HAP rent. ? 1 file where there was no reasonable rent documentation, however there was documentation from the initial move-in that showed comparable rents higher than the current amount. ? 1 file that did not contain a HAP contract. ? 1 file that had support showing the tenant earned $300 per month in unemployment income that was not reported on the 50058. This had no effect on the HAP rent. ? 1 file where the utility allowance was calculated using incorrect amounts from the utility allowance schedule, and should have been $38 lower. This had no effect on the HAP rent. In addition to the above, we noted the following during our new admissions testing (5 new admissions tested): ? 1 file that did not contain a HAP contract ? 1 file that did not contain a 214 affidavit or birth certificate for a member of the household ? 1 file where the Request for Tenancy form was signed but not dated by either party. Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: Errors were corrected in the tested files where corrections could be made. Meaning for example Form 9886 cannot be regenerated for this audit period but will be obtained during future annual recertification (also known as the personal declaration/application) periods. Adjustments will be made to the tenant accounts. Staff was informed to obtain Form 214 during all recertification re-examinations to ensure the required form is in the file. This way, if it was never obtained or if it was inadvertently purged, the file will always have a copy in the file for the review period. File Audit: A file audit (not a 100% audit) was completed for the Housing Choice Voucher Program. A procured third-party vendor performed this process. However, previous staff members did not make the file corrections. For months, there was only one staff member in the HCV Department. The department, at this time, is fully staffed. The current staff is making the file corrections as they come across various issues while moving the program/department forward. Quality Control Review: After completion of the file audit, the Housing Choice Voucher Program Manager and their supervisor will be responsible for documented monthly quality control reviews of 10% of files completed during the month. Effective Date: June 23, 2022 Contact Information Shannon Judd, Chief Executive Officer Sanford Housing Authority 1000 Carthage Street Sanford, North Carolina 27330 (919) 776-7655
FAC accepted this audit on December 8, 2021 — management decision was due June 8, 2022.
Out of a total tenant population of approximately 350 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where no documents were provided. ? 4 files where at least one Form 214 affidavit was missing, however the tenants were US Citizens (based on birth certificates in their files) and eligible for the program. ? 2 files where the signed personal declaration/application was not present. ? 1 file where a signed Form 9886 was not present. ? 3 files where there was no support for tenant income listed on Form 50058 ? 1 file where tenant income was not calculated correctly based on support in the file, which resulted in an underpayment of rent by $35 ? 2 files where there was no support for tenant deductions listed on Form 50058 ? 1 file where tenant medical expenses were overstated by $438, which resulted in an underpayment of rent by $11 ? 2 files where there was no signed lease agreement for the address listed on the Form 50058 ? 5 files where it does not appear an EIV was run. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
Show full finding ▾Hide full finding ▴2020-001 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2019-002 from the prior year September 30, 2019 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 350 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where no documents were provided. ? 4 files where at least one Form 214 affidavit was missing, however the tenants were US Citizens (based on birth certificates in their files) and eligible for the program. ? 2 files where the signed personal declaration/application was not present. ? 1 file where a signed Form 9886 was not present. ? 3 files where there was no support for tenant income listed on Form 50058 ? 1 file where tenant income was not calculated correctly based on support in the file, which resulted in an underpayment of rent by $35 ? 2 files where there was no support for tenant deductions listed on Form 50058 ? 1 file where tenant medical expenses were overstated by $438, which resulted in an underpayment of rent by $11 ? 2 files where there was no signed lease agreement for the address listed on the Form 50058 ? 5 files where it does not appear an EIV was run. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
The following is the corrective action planned by the Authority regarding the current finding: Finding No. 2020-001 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2019-002 from the prior year September 30, 2019 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 350 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file where no documents were provided. ? 4 files where at least one Form 214 affidavit was missing, however the tenants were US Citizens (based on birth certificates in their files) and eligible for the program. ? 2 files where the signed personal declaration/application was not present. ? 1 file where a signed Form 9886 was not present. ? 3 files where there was no support for tenant income listed on Form 50058 ? 1 file where tenant income was not calculated correctly based on support in the file, which resulted in an underpayment of rent by $35 ? 2 files where there was no support for tenant deductions listed on Form 50058 ? 1 file where tenant medical expenses were overstated by $438, which resulted in an underpayment of rent by $11 ? 2 files where there was no signed lease agreement for the address listed on the Form 50058 ? 5 files where it does not appear an EIV was run. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: Errors were corrected in the tested files where corrections could be made. Meaning for example, an EIV cannot be run for the audit period in question but can be run going forward. Adjustments were made to the tenant accounts. Another example is that the Form 9886 cannot be regenerated for this audit period but will be obtained during future annual recertification (also known as the personal declaration/application) periods. Staff was recently trained to obtain forms such as Form 214 annually (during each recertification period) to ensure the required form is in the file. Regarding the missing documents, the standard operating procedures were implemented, and a check list was created to ensure that all required documents for all household members are present in the files. The property management team was trained (by the CEO) on the standard operating procedures. The standard operating procedures were placed in binders and provided to the property management teams. There was a transition in the Housing Coordinator position. The current Housing Coordinator is now aware of her duties, to include printing the EIV reports and providing them to the property management teams prior to the start of their annual recertifications. File Audit: A 100% file audit was completed for the Public and Indian Housing Programs. A procured third-party vendor performed this process. However, previous staff members did not make the file corrections. Current staff has made and is making the file corrections. Quality Control Review: After completion of the file audit, the Property Manager and Director of Operations will be responsible for documented monthly quality control review of 10% of files completed during the month. Effective Date: December 7, 2021 Contact Information Shannon Judd, Chief Executive Officer Sanford Housing Authority 1000 Carthage Street Sanford, North Carolina 27330 (919) 776-7655
2019-002
FAC accepted this audit on September 27, 2020 — management decision was due March 27, 2021.
The Authority did not have adequate controls over the period-end financial reporting process to detect material misstatements. The Authority did not properly record entries related to receivables, construction in progress and fixed assets, tenant revenues and other income, CFP revenues, and other general expenses. Criteria: The Authority should have the necessary controls over the period-end financial reporting process to detect material misstatements without Auditor detection. Questioned Cost: None Effect: As a result of the audit, the Authority recorded the following: ? Adjusted Public Housing CFP revenues by $206,134 recorded against RAD receivables. Also, adjusted a related $206,134 of Construction in Progress (?CIP?) included in RAD receivables. Other adjustments resulted in a net increase of $100,360 to RAD receivables. ? There were numerous other adjustments to correct the accounting and inter-fund activity including reclassification of $379,145 of CFP CIP to Leasehold Improvements, reclassification of $54,000 in legal fees that should have been part of RAD receivables, adjusted amounts due from the COCC to HCV ($35,567), removed incorrect balance of $58,466 of HCV Fraud A/R, adjusted posting errors in Public Housing tenant revenues totaling $173,958, and reclassified $109,693 recorded in other general expenses against various revenue accounts. Cause: The Authority did not have the necessary controls over the period-end financial reporting process to detect material misstatements. In many of the mis-posting errors noted, the contracted fee accountant recorded the effect of prior year audit adjustments to the current year profit and loss thereby overstating both current year revenues and expenses. Other mis-postings appeared to be a result of a lack of management oversight over the accounting function. Auditor?s Recommendation: The Authority should establish controls to ensure that appropriate year-end adjustments are recorded so that the financial statements are fairly presented. Part of these controls should be for management to review the financial statements and financial information prepared by the contracted fee accountant to determine whether postings are reasonable and are as expected. In addition, it is also a good control for the board of commissioners to review the financial statements as part of the commissioner meetings and make inquiries of any transactions or balances that are unexpected or unusual. Also, the fee accountant should not post any prior year audit adjustments to current year profit and loss activity. Rather, the fee accountant should compare the prior year internal balance sheet to the prior year audited balance sheet and adjust the prior year internal balance sheet to agree to the prior year audited balance sheet to avoid any postings to current year balance sheet or income statement accounts. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. See corrective action plan.
Show full finding ▾Hide full finding ▴2019-001 Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat finding of finding 2018-001 from the prior year September 30, 2018 (originally occurred on finding 2015-001 from September 30, 2015) Condition: The Authority did not have adequate controls over the period-end financial reporting process to detect material misstatements. The Authority did not properly record entries related to receivables, construction in progress and fixed assets, tenant revenues and other income, CFP revenues, and other general expenses. Criteria: The Authority should have the necessary controls over the period-end financial reporting process to detect material misstatements without Auditor detection. Questioned Cost: None Effect: As a result of the audit, the Authority recorded the following: ? Adjusted Public Housing CFP revenues by $206,134 recorded against RAD receivables. Also, adjusted a related $206,134 of Construction in Progress (?CIP?) included in RAD receivables. Other adjustments resulted in a net increase of $100,360 to RAD receivables. ? There were numerous other adjustments to correct the accounting and inter-fund activity including reclassification of $379,145 of CFP CIP to Leasehold Improvements, reclassification of $54,000 in legal fees that should have been part of RAD receivables, adjusted amounts due from the COCC to HCV ($35,567), removed incorrect balance of $58,466 of HCV Fraud A/R, adjusted posting errors in Public Housing tenant revenues totaling $173,958, and reclassified $109,693 recorded in other general expenses against various revenue accounts. Cause: The Authority did not have the necessary controls over the period-end financial reporting process to detect material misstatements. In many of the mis-posting errors noted, the contracted fee accountant recorded the effect of prior year audit adjustments to the current year profit and loss thereby overstating both current year revenues and expenses. Other mis-postings appeared to be a result of a lack of management oversight over the accounting function. Auditor?s Recommendation: The Authority should establish controls to ensure that appropriate year-end adjustments are recorded so that the financial statements are fairly presented. Part of these controls should be for management to review the financial statements and financial information prepared by the contracted fee accountant to determine whether postings are reasonable and are as expected. In addition, it is also a good control for the board of commissioners to review the financial statements as part of the commissioner meetings and make inquiries of any transactions or balances that are unexpected or unusual. Also, the fee accountant should not post any prior year audit adjustments to current year profit and loss activity. Rather, the fee accountant should compare the prior year internal balance sheet to the prior year audited balance sheet and adjust the prior year internal balance sheet to agree to the prior year audited balance sheet to avoid any postings to current year balance sheet or income statement accounts. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. See corrective action plan.
2019-001 Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat finding of finding 2018-001 from the prior year September 30, 2018 (originally occurred on finding 2015-001 from September 30, 2015) Condition: The Authority did not have adequate controls over the period-end financial reporting process to detect material misstatements. The Authority did not properly record entries related to receivables, construction in progress and fixed assets, tenant revenues and other income, CFP revenues, and other general expenses. Auditor?s Recommendation: The Authority should establish controls to ensure that appropriate year-end adjustments are recorded so that the financial statements are fairly presented. Part of these controls should be for management to review the financial statements and financial information prepared by the contracted fee accountant to determine whether postings are reasonable and are as expected. In addition, it is also a good control for the board of commissioners to review the financial statements as part of the commissioner meetings and make inquiries of any transactions or balances that are unexpected or unusual. Also, the fee accountant should not post any prior year audit adjustments to current year profit and loss activity. Rather, the fee accountant should compare the prior year internal balance sheet to the prior year audited balance sheet and adjust the prior year internal balance sheet to agree to the prior year audited balance sheet to avoid any postings to current year balance sheet or income statement accounts. Action Taken: The audit period was October 1, 2018 ? September 30, 2019. While it is not reflective of this audit, due to timing, a new Chief Financial Officer (CFO) with GAAP Accounting experience was hired September 2019. The CFO will also require a review by a third-party with CPA experience, to further ensure accurate reporting of the unaudited financials completed by the Fee Accountant, prior to FDS submission. The CFO shall establish a timeline of receipt from the Fee Accountant to allow enough review time, comments, and corrective actions if necessary. In addition, the CFO shall ensure that all SHA financial policies and procedures are adhered to. The CFO shall be responsible for providing adequate explanations to all financial transactions and questions. Again, having a CPA on the SHA board will also be beneficial. Currently there is no one with CPA experience on the SHA board.
2018-001
Out of a total tenant population of approximately 358 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 Form 214 affidavits where the tenant didn?t check the box that showing the adult was signing for the minors. ? 2 Form 214 affidavits were missing for minors ? however, the tenants were US Citizens (based on the birth certificates in the files) and eligible for the program. ? 2 files where date of births were off by a couple of days. 1 file where the date of birth was off exactly a year. ? 1 file where it does not appear the EIV was run. ? 1 file with an income calculation error resulting in tenant paying too much rent by $28 per month. ? 1 file where social security for child listed twice (with different amounts - listed on both adult and child) which resulted in overstatement of income of $1,488. Also, the child care cost deduction of $1,405 was not supported. Net change to monthly income was only $2. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
Show full finding ▾Hide full finding ▴2019-002 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Significant deficiency in internal control, Other matters Repeat finding of finding 2018-002 from the prior year September 30, 2018 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 358 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 Form 214 affidavits where the tenant didn?t check the box that showing the adult was signing for the minors. ? 2 Form 214 affidavits were missing for minors ? however, the tenants were US Citizens (based on the birth certificates in the files) and eligible for the program. ? 2 files where date of births were off by a couple of days. 1 file where the date of birth was off exactly a year. ? 1 file where it does not appear the EIV was run. ? 1 file with an income calculation error resulting in tenant paying too much rent by $28 per month. ? 1 file where social security for child listed twice (with different amounts - listed on both adult and child) which resulted in overstatement of income of $1,488. Also, the child care cost deduction of $1,405 was not supported. Net change to monthly income was only $2. Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that amounts reported for tenant income and rent are calculated according to HUD rules. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding verification procedures and calculation of tenant income and rent. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
2019-002 Eligibility ? Tenant Files Public and Indian Housing ? CFDA Number 14.850 Significant deficiency in internal control, Other matters Repeat finding of finding 2018-002 from the prior year September 30, 2018 (originally occurred on finding 2017-002 from September 30, 2017) Condition: Out of a total tenant population of approximately 358 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 3 Form 214 affidavits where the tenant didn?t check the box that showing the adult was signing for the minors. ? 2 Form 214 affidavits were missing for minors ? however, the tenants were US Citizens (based on the birth certificates in the files) and eligible for the program. ? 2 files where date of births were off by a couple of days. 1 file where the date of birth was off exactly a year. ? 1 file where it does not appear the EIV was run. ? 1 file with an income calculation error resulting in tenant paying too much rent by $28 per month. ? 1 file where social security for child listed twice (with different amounts - listed on both adult and child) which resulted in overstatement of income of $1,488. Also, the child care cost deduction of $1,405 was not supported. Net change to monthly income was only $2. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility and rent calculations. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: All errors were corrected in the tested files. Adjustments were made to the tenant accounts. Regarding the missing documents, revisions to the standard operating procedure was implemented and a check list was created to ensure that all required documents for all household members are present in the files. The audit period was October 1, 2018 ? September 30, 2019. In May 2020, the Property Manager implemented a two-level quality assurance process such that all files are reviewed once completed. Additionally, the EIV reports are now obtained solely by the Housing Coordinator. Training: All formerly-hired property management staff completed rent calculation and occupancy training with Nan McKay. All property management will complete a three-part training on public housing income and rent calculation, facilitated by a procured third-party vendor. Staff will learn procedures for determining, calculating, and documenting income and rent calculations. In addition, staff will complete monthly in-house trainings to keep abreast of policy updates and standard operating procedures. File Audit: A 100% file audit will be completed for the Public and Indian Housing Programs. A procured third-party vendor will oversee this process. A trend analysis to determine any common mistakes or incorrect policy application will be completed. In 2019 it was required that staff begin using the Nan McKay file audit templates to ensure file completeness and correct calculations. Training and/or a disciplinary corrective action plans will be implemented as necessary. The timeline for completion of the file review will be May 30, 2021. Quality Control Review: After completion of the file audit, the Property Manager and Director of Operations will be responsible for monthly quality control review of 10% of files completed during the month.
2018-002
Out of a total tenant population of approximately 558 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file with a deduction error. Changed HAP by $26. ? 1 file with an income error. Changed HAP by $41. ? 2 files missing EIV. For one file SS# was keyed in wrong so system couldn?t find tenant. ? Hap payment error. Internal system was picking up the payments standards for a project-based property, which it shouldn?t. Changed HAP by $20. As part of our new admissions testing, we also 1 file where a background check could not be located. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payment to landlords. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
Show full finding ▾Hide full finding ▴2019-003 Eligibility ? Tenant Files Section 8 Housing Choice Vouchers Program ? CFDA Number 14.871 Significant deficiency in internal control, Other matters Repeat finding of finding 2018-003 from the prior year September 30, 2018 (originally occurred on finding 2015-003 from September 30, 2015) Condition: Out of a total tenant population of approximately 558 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file with a deduction error. Changed HAP by $26. ? 1 file with an income error. Changed HAP by $41. ? 2 files missing EIV. For one file SS# was keyed in wrong so system couldn?t find tenant. ? Hap payment error. Internal system was picking up the payments standards for a project-based property, which it shouldn?t. Changed HAP by $20. As part of our new admissions testing, we also 1 file where a background check could not be located. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as complete and accurate tenant files. In addition, the Authority?s administrative plan also requires following proper procedures for determination of HAP and documentation in the tenant files. Questioned Cost: None Effect: The Authority is not in compliance with all of the HUD requirements regarding eligibility and tenant recertifications, which could result in incorrect total tenant payments for rent and HAP payment to landlords. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls. A tenant file and unit quality control procedure has been developed and implemented. See corrective action plan.
2019-003 Eligibility ? Tenant Files Section 8 Housing Choice Vouchers Program ? CFDA Number 14.871 Significant deficiency in internal control, Other matters Repeat finding of finding 2018-003 from the prior year September 30, 2018 (originally occurred on finding 2015-003 from September 30, 2015) Condition: Out of a total tenant population of approximately 558 tenants, 25 files were selected for testing. Exceptions were noted as follows: ? 1 file with a deduction error. Changed HAP by $26. ? 1 file with an income error. Changed HAP by $41. ? 2 files missing EIV. For one file SS# was keyed in wrong so system couldn?t find tenant. ? HAP payment error. Internal system was picking up the payments standards for a project-based property, which it shouldn?t. Changed HAP by $20. As part of our new admissions testing, we also noted 1 file where a background check could not be located. Auditor?s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Action Taken: All errors were corrected in the tested files. In 2020, a revision to the standard operating procedure was implemented. Housing Choice Voucher (HCV) staff now reviews the file in its entirety to ensure all required documents for all household members are present and completed as required. In June 2020, the HCV Manager implemented a two-level quality assurance process such that all files are reviewed once completed. Training: HCV Specialists completed Advanced Rent Calculation Training in May 2019. In addition, staff will complete monthly in-house trainings to keep abreast of policy updates and standard operating procedures. File Audit: A 100% file audit will be completed for the Housing Choice Voucher Program. A procured third-party vendor will oversee this process. A trend analysis to determine any common mistakes or incorrect policy application will be completed. We will use the Nan McKay file audit templates to ensure file completeness and correct calculations. Training and/or a corrective action plan will be implemented as necessary. The timeline for completion of the file review will be May 30, 2021. Quality Control Review: After completion of the file audit, the HCV Manager and Director of Operations will be responsible for monthly quality control review of 10% of files completed during the month.
2018-003
During our testing of the Public Housing waiting list (25 tested) and New Admissions (3 tested), we noted the following errors: Current waiting list ? 1 file where application says 9/19/19, while waiting list shows 6/17/19. This would have affected her placement by 5 positions. ? 1 file with a preference issue that would have moved up the applicant by 50 positions. New admissions ? Of the 3 tested, 2 were true new admissions (1 was a unit transfer). We could not determine if the 2 were properly admitted as the waiting lists these were selected from were not available. ? 1 of the new admissions may have been admitted out of order. The date on the application shows as 4/8/19 (4:33 PM) while the new admissions report shows the application date of 1/26/15 (12:10 PM). Criteria: The Authority is required to maintain a waiting list and admit tenants based on the waiting list, sorted in order by preferences and date and time, in accordance with HUD requirements and the Authority?s policies as stated in the ACOP. Questioned Costs: None. Effect: The Authority is not in compliance with its waiting list and may admit applicants in an incorrect order. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should review the waiting list and assure that all applicants listed on the waiting list should be on the list as well as assuring that the waiting list contains the appropriate preference points and dates and times as listed on the tenant application. Also, the Authority should retain the waiting list page showing the position of the applicant on the waiting list to support the applicant was properly selected from the waiting list. In addition, the Authority should provide additional training to staff maintaining the waiting list and implement review procedures in order to prevent, detect and correct errors timely. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls and have provided additional training to the staff. See corrective action plan.
Show full finding ▾Hide full finding ▴2019-004 Special Tests and Provisions - Waiting Lists and New Admissions Public and Indian Housing ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2018-005 from the prior year September 30, 2018 Condition: During our testing of the Public Housing waiting list (25 tested) and New Admissions (3 tested), we noted the following errors: Current waiting list ? 1 file where application says 9/19/19, while waiting list shows 6/17/19. This would have affected her placement by 5 positions. ? 1 file with a preference issue that would have moved up the applicant by 50 positions. New admissions ? Of the 3 tested, 2 were true new admissions (1 was a unit transfer). We could not determine if the 2 were properly admitted as the waiting lists these were selected from were not available. ? 1 of the new admissions may have been admitted out of order. The date on the application shows as 4/8/19 (4:33 PM) while the new admissions report shows the application date of 1/26/15 (12:10 PM). Criteria: The Authority is required to maintain a waiting list and admit tenants based on the waiting list, sorted in order by preferences and date and time, in accordance with HUD requirements and the Authority?s policies as stated in the ACOP. Questioned Costs: None. Effect: The Authority is not in compliance with its waiting list and may admit applicants in an incorrect order. Cause: Significant turnover and lack of proper oversight contributed to the errors noted. Procedures to ensure compliance with all of the HUD requirements were not being fully implemented. Auditor?s Recommendation: The Authority should review the waiting list and assure that all applicants listed on the waiting list should be on the list as well as assuring that the waiting list contains the appropriate preference points and dates and times as listed on the tenant application. Also, the Authority should retain the waiting list page showing the position of the applicant on the waiting list to support the applicant was properly selected from the waiting list. In addition, the Authority should provide additional training to staff maintaining the waiting list and implement review procedures in order to prevent, detect and correct errors timely. Views of Responsible Officials of the Auditee: We concur with the recommendation and have implemented various controls and have provided additional training to the staff. See corrective action plan.
2019-004 Special Tests and Provisions - Waiting Lists and New Admissions Public and Indian Housing ? CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat finding of finding 2018-005 from the prior year September 30, 2018 Condition: During our testing of the Public Housing waiting list (25 tested) and New Admissions (3 tested), we noted the following errors: Current waiting list ? 1 file where application says 9/19/19, while waiting list shows 6/17/19. This would have affected her placement by 5 positions. ? 1 file with a preference issue that would have moved up the applicant by 50 positions. New admissions ? Of the 3 tested, 2 were true new admissions (1 was a unit transfer). We could not determine if the 2 were properly admitted as the waiting lists these were selected from were not available. ? 1 of the new admissions may have been admitted out of order. The date on the application shows as 4/8/19 (4:33 PM) while the new admissions report shows the application date of 1/26/15 (12:10 PM). Auditor?s Recommendation: The Authority should review the waiting list and assure that all applicants listed on the waiting list should be on the list as well as assuring that the waiting list contains the appropriate preference points and dates and times as listed on the tenant application. Also, the Authority should retain the waiting list page showing the position of the applicant on the waiting list to support the applicant was properly selected from the waiting list. In addition, the Authority should provide additional training to staff maintaining the waiting list and implement review procedures in order to prevent, detect and correct errors timely. Action Taken: The audit period was October 1, 2018 ? September 30, 2019. All files on the current waiting list were reviewed for correct preference point application, and application date and time. However, this process was not completed until the last quarter of 2019. In addition, site-based waiting list were developed. A third-party vendor will be procured to review the waiting lists for correct preference point application, and application date and time. The timeline for completion of the waiting list review is January 31, 2021. In addition, the operating procedure has been changed to reduce the number of staff members involved in the data entry process. In 2019, the Housing Coordinator became the sole staff person responsible for data entry. In the past, all Assistant Property Managers assisted with data entry. Software Updates: The software provider has updated our software so that a report will print to show the applicants waitlist status at time of move*in. To prevent data entry errors moving forward, SHA has purchased the Online Application module from its software provider. Waiting list applications will only be accepted online, so that the preference points, dates, and times will be computer generated. The software program will be tested before implementation. Training: Public Housing staff will complete training on how to effectively manage a waiting list. The procured third-party vendor will offer training and will focus on the waiting list and steps for correct tenant file management. Effective Date: September 24, 2020 Contact Information: Shannon Judd, Executive Director (919) 776-7655 1000 Carthage Street Sanford, North Carolina 27330
2018-005
FAC accepted this audit on June 10, 2019 — management decision was due December 10, 2019.
GSA_MIGRATION
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2017-001
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2017-002
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2017-003
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2017-004
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GSA_MIGRATION
FAC accepted this audit on April 8, 2018 — management decision was due October 8, 2018.
GSA_MIGRATION
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2016-001
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2016-002
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2016-003
FAC accepted this audit on March 1, 2017 — management decision was due September 1, 2017.
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2015-001
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2015-003
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