Melbourne Housing AuthorityLocal Government

2024-001 Special Tests and Provisions – UEL Formula (Form 52722) and Formula Income Public and Indian Housing Program – CFDA 14.850 Material Weakness in Internal Control and Material Noncompliance Criteria: The Authority receives invoices for utilities. The consumption and cost data from those invoices are aggregated, in an Excel workbook or other platform, commonly referred to as a utility ledger. The aggregated data is transferred to Form 52722 to calculate the utility expense level (UEL). The UEL is a primary component of the operating subsidy grant revenue of the Authority, which is calculated on Form 52723. Form 52723 uses a formula to calculate the Operating Fund Revenue for the Authority. The calculation is generally based on prepopulated data calculated by HUD. However, in some cases, the formulaic fields are not prepopulated. Form 52722 and 52723 need to be reported correctly to ensure the operating subsidy grant revenue is calculated correctly for the future period. Condition: Unable to test HUD Form 52722, 52723, and the utility ledger for accuracy and completion. Cause: Former employees of the Authority did not retain the utility ledger. Effect: The Authority did not retain the utility ledger as required by HUD. The Authority is not in compliance with this reporting requirement. Failure to properly maintain records could lead to significant issues in funding. Questioned Cost: None Recommendation: The Authority should retain the utility ledger for each fiscal year under audit. Views of Responsible Officials of the Auditee: We concur with the recommendation. Due to the ongoing COVID-19 pandemic and related staff absences and turnover, we were not able to retain the utility ledger. We will retain the utility ledger for each fiscal year under audit.

2022-002 Reporting ? Inaccurate and Late FDS Submission and Late OMB Data Collection Form Submission Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control Material Noncompliance Repeat finding of 2021-002 from March 31, 2021 Condition: The Authority?s original unaudited FDS filing was materially misstated. In addition, the Authority did not report the CARES Act activity in a separate column of the FDS as required. Also, the unaudited FDS filings were not submitted within the timeframes specified by HUD. The Authority submitted the unaudited FDS filing on May 26, 2023 (of which the normal due date was May 31, 2022). The Authority was also required to submit the audited FDS filing and the OMB Data Collection form to the Federal Audit Clearinghouse (?FAC?) by December 31, 2022 at completion of the single audit, but it was not filed timely, as the audit was completed on August 16, 2023. Criteria: The Real Estate Assessment Center ("REAC") requires an accurate and timely submission of the unaudited and 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). Questioned Cost: None Effect: The Authority did not submit a materially correct unaudited and audited FDS within the time frames required by HUD, and therefore, was noncompliant with this reporting requirement as well as the requirement to submit the OMB Data Collection Form during the required time frame. Failure to properly file these forms timely could lead to significant issues, including delays in funding. Cause: The Authority did not have the necessary controls over the period-end financial reporting process to detect material misstatement and to file required submissions timely. The Authority experienced business disruptions due to the ongoing COVID-19 pandemic, including staff absences and turnover. Recommendation: The Authority should make every effort to file its REAC submissions accurately and timely and submit the OMB Data Collection form timely. Views of Responsible Officials of the Auditee: We concur with the recommendation. Due to the COVID-19 pandemic and related staff absences and turnover, we were not able to accurately close the books before the HUD specified unaudited and audited FDS filing deadline and unable to timely file the OMB Data Collection Form. We are very focused on ensuring there is adequate staffing and sufficient processes in place in order to be able to close the books prior to submitting a materially accurate unaudited FDS submission for the following fiscal year as well as timely file the audited FDS and OMB Data Collection Form.

2022-003 Eligibility: Public Housing Tenant Files Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control Material Noncompliance Condition: Out of a total tenant population of approximately 145 tenant files, 15 files were selected for testing. Exceptions were noted as follows: ? 1 tenant file where the Authority was unable to locate certain documents and therefore could not test items such as Form 9886, birth certificates, social security cards, income and deduction support, utility allowance schedules and EIV verification. ? 1 tenant file where dependent?s 214 affidavit was not signed. However, we did note that the dependent was a US Citizen (per review of birth certificate) and therefore eligible for the program. ? 1 tenant file where tenant?s reported income was incorrect on the Form 50058. However, this had no impact on tenant?s rent as this was a flat rent unit. We also noted as part of our new admissions testing (3 selected for testing out of population of 23 new admissions) the following: ? 1 new admission where the applicant and dependent?s Form 214 were not signed. However, it was noted that the applicants were citizens (per review of birth certificate information) and therefore eligible for the program. Criteria: 24 CFR 960.253 - 259 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 Admissions and Continued Occupancy Policy (ACOP) also requires following proper procedures for determination of rent 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 recertification, which could result in incorrect total tenant payments for rent. Cause: Procedures to ensure compliance with all of the HUD requirements were not carefully followed. 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. Due to the COVID-19 pandemic and related staff absences and turnover, we were not able to locate certain documents. We will assure that files are complete and are supported with proper documentation.

2021-002 Reporting ? Inaccurate and Late FDS Submission and Late OMB Data Collection Form Submission Public and Indian Housing Program ? CFDA Number 14.850 Material Weakness in Internal Control Material Noncompliance Condition: The Authority?s original unaudited FDS filing was materially misstated. In addition, the Authority did not report the CARES Act activity in a separate column of the FDS as required and did not segregate the blended component unit activity on the FDS (it was combined in business activities). Also, the unaudited FDS filings were not submitted within the timeframes specified by HUD (including extensions provided). The Authority submitted the unaudited FDS filing on June 21, 2022 (of which the normal due date was May 30, 2021). The Authority was also required to submit the audited FDS filing and the OMB Data Collection form to the Federal Audit Clearinghouse (?FAC?) by June 30, 2022 (as extended by six months for COVID whereas it was originally due by December 31, 2021) at completion of the single audit, but it was not filed timely, as the audit was completed on February 1, 2023. Criteria: The Real Estate Assessment Center ("REAC") requires an accurate and timely submission of the unaudited and 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 Cost: None Effect: The Authority did not submit a materially correct unaudited and audited FDS within the time frames required by HUD (as extended), and therefore, was noncompliant with this reporting requirement as well as the requirement to submit the OMB Data Collection Form during the required time frame (as extended). Failure to properly file these forms timely could lead to significant issues, including delays in funding. Cause: The Authority did not have the necessary controls over the period-end financial reporting process to detect material misstatement and to file required submissions timely. The Authority experienced business disruptions due to the ongoing COVID-19 pandemic, including staff absences and turnover. Recommendation: The Authority should make every effort to file its REAC submissions accurately and timely and submit the OMB Data Collection form timely. Views of Responsible Officials of the Auditee: We concur with the recommendation. Due to the ongoing COVID-19 pandemic and related staff absences and turnover, we were not able to accurately close the books before the HUD specified unaudited and audited FDS filing deadline and unable to timely file the OMB Data Collection Form. We are very focused on ensuring there is adequate staffing and sufficient processes in place in order to be able to close the books prior to submitting a materially accurate unaudited FDS submission for the following fiscal year as well as timely file the audited FDS and OMB Data Collection Form (as extended).