EIN: 636001654
UEI: Z5JCMDJMECM7
Audited by: JOHN RUSSELL AND ASSOCIATES INC.
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 23, 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 March 23, 2026 (165 days ago).
What is a management decision? →2024-001 CASH MANAGEMENT: COMPLIANCE REQUIREMENT: Cash Management CONDITION AND CRITERIA: Housing Authorities are required to have a sound cash management system in place to ensure that funds are reimbursed on a timely basis. During the current fiscal year audit, it was noted that business activities owed the component unit account amounts that are not expected to be repaid in the 2025 fiscal year. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Significant deficiency CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: Funds were not reimbursed on a timely basis. QUESTIONED COSTS: None known. AUDITORS' RECOMMENDATION: We recommend that the Housing Authority strengthen its internal contraols to ensure funds are reimbursed on a timely basis.
Show full finding ▾Hide full finding ▴2024-001 CASH MANAGEMENT: COMPLIANCE REQUIREMENT: Cash Management CONDITION AND CRITERIA: Housing Authorities are required to have a sound cash management system in place to ensure that funds are reimbursed on a timely basis. During the current fiscal year audit, it was noted that business activities owed the component unit account amounts that are not expected to be repaid in the 2025 fiscal year. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Significant deficiency CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: Funds were not reimbursed on a timely basis. QUESTIONED COSTS: None known. AUDITORS' RECOMMENDATION: We recommend that the Housing Authority strengthen its internal contraols to ensure funds are reimbursed on a timely basis.
The outstanding balance currently reflected in the books represents unreconciled funds resulting from the transfer of assets and liabilities during the conversion of the Public Housing Program to the RAD Project-Based Rental Assistance (PBRA) Program. These funds were carried forward following the transition of ownership and operations from the PHA to Athens Housing Management, LLC, as the new ownership entity. By HUD RAD guidance, including the RAD Notice Revision 4 (H-2019-09/PIH-2019-23), when a public housing project converts to PBRA under RAD, the PHA is required to transfer assets and liabilities to the new ownership entity to ensure continuity and financial integrity of the property. Specifically, Attachment 1A to the RAD Notice outlines the obligation to transfer project-specific assets and liabilities from the public housing ledger to the new entity, including cash, receivables, and project-level obligations. The amounts in question were initially anticipated to be reconciled as part of that process. However, due to the complexity of the transition and lack of adequate internal controls at the time, the residual balance has remained unreconciled for the past five fiscal years. These amounts are not expected to be repaid or resolved in FY 2025. As such, this is a one-time, non-recurring issue, and corrective action is underway. Staff will formally seek HUD’s approval and submit a resolution to the Boards of both the Housing Authority (the management entity) and Athens Housing Management LLC (the ownership entity), requesting that the outstanding balance be written off. This action will appropriately clear the books of legacy items tied to the conversion and align the accounting records of both entities. This write-off recommendation aligns with best practices in governmental accounting for long-standing inter-entity balances that are no longer collectible or relevant to current operations. Additional internal controls have since been implemented to prevent recurrence, including improved cash management oversight, inter-entity reconciliation protocols, and timely financial reporting.
2024-002 TENANT FILES: COMPLIANCE REQUIREMENT: Eligibility CONDITION AND CRITERIA: Housing Authorities under the RAD program are required to obtain an authorization for release of information (HUD Form 9887) and they are required to update the gross rents annually based on the annual OCAF. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Significant Deficiency CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: It was noted that 30 of the 40 tenant files tested did not contain the signed and dated 9887. It was also noted that all 40 tenant files did not contain the annual gross rent certification. QUESTIONED COSTS: None known. AUDITORS' RECOMMENDATION: We recommend that the Housing Authority strengthen its internal controls to ensure they are in compliance with HUD requirements.
Show full finding ▾Hide full finding ▴2024-002 TENANT FILES: COMPLIANCE REQUIREMENT: Eligibility CONDITION AND CRITERIA: Housing Authorities under the RAD program are required to obtain an authorization for release of information (HUD Form 9887) and they are required to update the gross rents annually based on the annual OCAF. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Significant Deficiency CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: It was noted that 30 of the 40 tenant files tested did not contain the signed and dated 9887. It was also noted that all 40 tenant files did not contain the annual gross rent certification. QUESTIONED COSTS: None known. AUDITORS' RECOMMENDATION: We recommend that the Housing Authority strengthen its internal controls to ensure they are in compliance with HUD requirements.
The property manager attended a couple of multifamily housing specialist training courses and received certification. The required update to the gross rents, annually based on the OCAF, will be corrected in tenants' files moving forward. The Housing Authority has put a quality control system in place to ensure the tenants' files are in compliance. We expect to be in compliance moving forward.
2023-001
2024-003 RESERVE FOR REPLACEMENT: COMPLIANCE REQUIREMENT: Special Tests and Provisions. CONDITION AND CRITERIA: Housing Authorities, under the RAD Program, are required to make required annual contributions to the Reserve for Replacement account from their operating funds. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Material Weakness CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: The Reserve for Replacement account was not properly funded. QUESTIONED COSTS: None known. AUDITORS' RECOMENDATION: We recommend that the Housing Authority strengthen its internal controls to ensure funds are placed into the Reserve for Replacement account on a timely basis.
Show full finding ▾Hide full finding ▴2024-003 RESERVE FOR REPLACEMENT: COMPLIANCE REQUIREMENT: Special Tests and Provisions. CONDITION AND CRITERIA: Housing Authorities, under the RAD Program, are required to make required annual contributions to the Reserve for Replacement account from their operating funds. ASSISTANCE LISTING NUMBER: 14.195, Section 8 Housing Assistance Payments Program TYPE OF FINDING: Material Weakness CAUSE: The internal control structure was not adequate to prevent these deficiencies. EFFECT: The Reserve for Replacement account was not properly funded. QUESTIONED COSTS: None known. AUDITORS' RECOMENDATION: We recommend that the Housing Authority strengthen its internal controls to ensure funds are placed into the Reserve for Replacement account on a timely basis.
We acknowledge the finding regarding the inadequate funding of the Reserve for Replacement account. The deficiency occurred due to lapses in internal controls over the timing and processing of required deposits, as managed by the independent accounting firm responsible for maintaining our books and preparing monthly financial statements. In accordance with HUD Handbook 350.1, Chapter 4, Paragraph 4-13, which requires owners to make monthly deposits into the Reserve for Replacement account as specified in the Regulatory Agreement, the Ownership Entity has taken the following corrective actions: 1. – The accounting firm has been formally instructed, in writing, to include verification of the monthly reserve deposit as a standing item in their month-end close process and to provide evidence of the completed transfer with each monthly financial package. 2. Management Oversight – Ownership will review and sign off on the monthly reserve funding documentation before approving the financial statements for submission to the Board of Commissioners. 3. Quarterly Compliance Review – In addition to monthly monitoring, management will conduct a quarterly compliance review to ensure full adherence to HUD Handbook4350.1 requirements and the property's Regulatory Agreement.
2023-002
FAC accepted this audit on October 7, 2024 — management decision was due April 7, 2025.
• We noted 8 files out of 40 tested did not contain sufficient income verification documentation. • We noted rental charges for 20 tenants out of 40 tested did not match the amount per the recertification and tenant file due to the recertification not being performed within the 12 month period. Cause: Policies and procedures with respect to the determination of eligibility and maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of the Subsidized Multifamily Housing Programs were not consistently followed. Effect: The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income and potential errors in the rent subsidies paid by HUD. Questioned Costs: Undetermined. Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. Views of Responsible Officials and Planned Corrective Action: The Housing Authority believes they have all files up to date and with sufficient supporting documentation into 2024. The Housing Authority staff also plans to take continuing education courses on the management of the RAD program.
Show full finding ▾Hide full finding ▴Department of Housing and Urban Development - Section 8 Housing Assistance Payment Program ALN # 14.195 – Section 8 Project-Based Cluster Significant Deficiency and Material Instance of Noncompliance – Eligibility 2023-001 - Determination of Contract Rents and Maintenance of Tenant Files Criteria: OMB Uniform Guidance Compliance Supplement for the Section 8 Housing Assistance Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. The program also includes other non-financial eligibility requirements, including required unit inspections on an annual basis. Condition: • We noted 8 files out of 40 tested did not contain sufficient income verification documentation. • We noted rental charges for 20 tenants out of 40 tested did not match the amount per the recertification and tenant file due to the recertification not being performed within the 12 month period. Cause: Policies and procedures with respect to the determination of eligibility and maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of the Subsidized Multifamily Housing Programs were not consistently followed. Effect: The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income and potential errors in the rent subsidies paid by HUD. Questioned Costs: Undetermined. Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. Views of Responsible Officials and Planned Corrective Action: The Housing Authority believes they have all files up to date and with sufficient supporting documentation into 2024. The Housing Authority staff also plans to take continuing education courses on the management of the RAD program.
2023-001 - Determination of Contract Rents, Maintenance of Tenant Files Condition: Eligibility recertification procedures required as a part of the annual recertification have not been performed or not performed sufficiently for tenants housed as of December 31, 2023. Corrective Action Planned: Staff has worked diligently to get all tenants housed at the Housing Authority recertified with sufficient documentation. Management believes all issues with tenant files to be corrected as of the report date. Staff are to receive continued education training on the operations of the RAD program and the compliance requirements. Person responsible for corrective action: Akinola Popoola, Executive Director Telephone: (256) 232-5300 x 8 Trudi Harris, Property Manager Anticipated Completion Date: Management believes files have been corrected as of the 2023 year-end audit report date.
2022-002
As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Management failed to follow required procedures for making the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: Management should establish internal controls and procedures to ensure that required monthly deposits are made in accordance with the RCC. Views of Responsible Officials and Planned Corrective Action: Management will make the monthly required deposits for the reserve in accordance with grant program requirements and their established procedures.
Show full finding ▾Hide full finding ▴Significant Deficiency and Material Instance of Noncompliance - Special Tests & Provisions 2023-002 - Reserve Funds for Replacement Criteria: In accordance with its Housing Assistance Payment contract/RAD Conversion Commitment (RCC), the Housing Authority is required to establish and maintain a replacement reserve in an interest-bearing account to aid in funding extraordinary maintenance and repair and replacement of capital items in accordance with the RCC. Condition: As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Management failed to follow required procedures for making the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: Management should establish internal controls and procedures to ensure that required monthly deposits are made in accordance with the RCC. Views of Responsible Officials and Planned Corrective Action: Management will make the monthly required deposits for the reserve in accordance with grant program requirements and their established procedures.
2023-002 – Reserve Funds for Replacement Condition: Current year HUD required reserve deposits were not made in accordance with the RCC. Corrective Action Planned: Management is to make the required deposits to get the account funded at a level in compliance with the RCC. Person responsible for corrective action: Akinola Popoola, Executive Director Telephone: (256) 232-5300 x 8 Trudi Harris, Property Manager Anticipated Completion Date: Management expects the accounts to be back in compliance by the end of the 2024 fiscal year.
FAC accepted this audit on October 30, 2023 — management decision was due April 30, 2024.
• We did not note any evidence of unit inspections in the 40 files reviewed. • We noted 8 files out of 40 tested did not contain sufficient income verification documentation. • We noted 5 files out of 40 tested did not have an accurately calculated rent and HAP. • We noted 2 files out of 40 tested did not receive a timely recertification. Cause: Backlog of recertifications was created by turnover issues and lack of management oversight in the prior year(s). Housing Authority has worked to get all files back up to date. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Housing unit conditions were not inspected or reviewed by the Housing Authority. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. We recommend the Housing Authority perform inspections for all units annually as required. Views of Responsible Officials and Planned Corrective Action: The Housing Authority believes they have all files up to date and with sufficient supporting documentation into 2023. The Housing Authority staff also plans to take continuing education courses on the management of the RAD program. The Housing Authority plans to inspected all units prior to the end of 2023.
Show full finding ▾Hide full finding ▴2022-002 - Determination of Contract Rents and Maintenance of Tenant Files Criteria: OMB Uniform Guidance Compliance Supplement for the Section 8 Housing Assistance Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. The program also includes other non-financial eligibility requirements, including required unit inspections on an annual basis. Condition: • We did not note any evidence of unit inspections in the 40 files reviewed. • We noted 8 files out of 40 tested did not contain sufficient income verification documentation. • We noted 5 files out of 40 tested did not have an accurately calculated rent and HAP. • We noted 2 files out of 40 tested did not receive a timely recertification. Cause: Backlog of recertifications was created by turnover issues and lack of management oversight in the prior year(s). Housing Authority has worked to get all files back up to date. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Housing unit conditions were not inspected or reviewed by the Housing Authority. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. We recommend the Housing Authority perform inspections for all units annually as required. Views of Responsible Officials and Planned Corrective Action: The Housing Authority believes they have all files up to date and with sufficient supporting documentation into 2023. The Housing Authority staff also plans to take continuing education courses on the management of the RAD program. The Housing Authority plans to inspected all units prior to the end of 2023.
Corrective Action Plan for Findings and Questioned Costs for Year Ended December 31, 2022 Corrective Action Plan Finding: 2022-001- Material Adjusting Journal Entries Condition: Various financial statements amounts including: prepaid expenses, federal awards revenues and federal award receivables were either misstated or improperly recorded at year-end. As a result of the audit procedures performed, material audit adjustments were required to be recorded. Corrective Action Planned: Adjustments determined to be one-time errors due to the difficult working conditions through the pandemic and due to limited staff. Management has employed an additional administrative support staff employee during the current year. Management does not expect issues related to these accounts moving forward. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management believes the issues to be rectified as it relates to the material audit adjustments as of the report date. 2022-002- Determination of Contract Rents, Maintenance of Tenant Files Condition: Eligibility recertification procedures required as a part of the annual recertification have not been performed or not performed sufficiently for tenants housed as of December 31, 2022. Corrective Action Planned: Management employed an additional administrative support employee to assist in performing updated annual recertifications. Staff has worked diligently to get all tenants housed at the Housing Authority recertified with sufficient documentation. Management believes all issues with tenant files to be corrected as of the report date. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management believes files have been corrected as of the 2022 year-end audit report date.
2021-003
FAC accepted this audit on October 2, 2022 — management decision was due April 2, 2023.
? Of the first 8 tenant files reviewed, we noted 4 tenant files for which 3rd party income verification was not documented for the recertification. This is a repeat finding. ? Of the first 8 tenant files reviewed, we noted at least one exception for each file tested. Further testing was not deemed necessary. Cause: Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. Views of Responsible Officials and Planned Corrective Action: The Housing Authority has employed an individual in June 2021 to assist management in getting all recertifications up to date. The lightening of the effects from the COVID-19 pandemic have helped the Housing Authority sustain consistent operations and they believe they are caught up on all recertifications in 2022.
Show full finding ▾Hide full finding ▴2021-003 - Determination of Contract Rents and Maintenance of Tenant Files Criteria: OMB Uniform Guidance Compliance Supplement for the Section 8 Housing Assistance Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. Condition: ? Of the first 8 tenant files reviewed, we noted 4 tenant files for which 3rd party income verification was not documented for the recertification. This is a repeat finding. ? Of the first 8 tenant files reviewed, we noted at least one exception for each file tested. Further testing was not deemed necessary. Cause: Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. Views of Responsible Officials and Planned Corrective Action: The Housing Authority has employed an individual in June 2021 to assist management in getting all recertifications up to date. The lightening of the effects from the COVID-19 pandemic have helped the Housing Authority sustain consistent operations and they believe they are caught up on all recertifications in 2022.
2021-003- Determination of Contract Rents, Maintenance of Tenant Files Condition: Income verification procedures required as a part of the annual recertification have not been performed or not performed sufficiently for tenants housed as of 12/31/2021. Corrective Action Planned: Management employed an additional administrative support employee to assist in performing updated annual recertifications in June 2021 for all inaccurate or insufficiently performed recertifications. Quality control review performed over all tenant files by 2021 year-end to determine which to be called in immediately for correction. Management believes all issues with tenant files have been rectified by the report date. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management believes files have been corrected as of the 2021 year-end audit report date.
2020-003
As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Management failed to make the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: The delinquent replacement reserves should be made per the RCC as soon as possible and procedures should be implemented to ensure that all future required deposits are made in a timely manner. Views of Responsible Officials and Planned Corrective Action: Management has made the required reserve deposits in the replacement for reserve accounts for each project subsequent to year-end. Management will continue to make the monthly required deposits for the reserve in accordance with grant program requirements.
Show full finding ▾Hide full finding ▴2021-004 - Reserve Funds for Replacement Criteria: In accordance with its Housing Assistance Payment contract/RAD Conversion Commitment (RCC), the Housing Authority is required to establish and maintain a replacement reserve in an interestbearing account to aid in funding extraordinary maintenance and repair and replacement of capital items in accordance with the RCC. Condition: As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Management failed to make the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: The delinquent replacement reserves should be made per the RCC as soon as possible and procedures should be implemented to ensure that all future required deposits are made in a timely manner. Views of Responsible Officials and Planned Corrective Action: Management has made the required reserve deposits in the replacement for reserve accounts for each project subsequent to year-end. Management will continue to make the monthly required deposits for the reserve in accordance with grant program requirements.
2021-004 - Reserve Funds for Replacement Condition: As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Corrective Action Planned: Management is to make the required initial deposit and subsequent required monthly and/or annual deposits in accordance with the RCC. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management to make the required monthly deposits to the reserve in accordance with the RCC going forward.
2020-004
FAC accepted this audit on April 20, 2022 — management decision was due October 20, 2022.
? Of the first 8 tenant files reviewed, we noted 4 tenant files for which 3rd party income verification was not documented for the recertification. This is a repeat finding. ? Of the first 8 tenant files reviewed, we noted at least one exception for each file tested. Further testing was not deemed necessary. ? We determined that management failed to request housing assistance payments for numerous months during the fiscal year Cause: Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Management failed to properly utilize its software to upload the information necessary for subsidy billings. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Due to the failure to upload subsidy billings via TRACS the Agency did not receive several months of HAP receipts to fund ongoing operations. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly. We also recommend the Housing Authority upload the necessary information to TRACS in order to receive its subsidy funding. Views of Responsible Officials and Planned Corrective Action: The Housing Authority has employed an individual subsequent to year-end to assist management in getting all recertifications up to date. The lightening of the effects from the COVID-19 pandemic have helped the Housing Authority sustain consistent operations and they intend to hire an additional individual to assist in performing tenant recertifications.
Show full finding ▾Hide full finding ▴Department of Housing and Urban Development - Section 8 Housing Assistance Payment Program ALN # 14.195 Material Instance of Noncompliance ? Eligibility 2020-003 - Determination of Contract Rents, Maintenance of Tenant Files & Failure to Request Housing Assistance Payments on Behalf of Families Criteria: OMB Uniform Guidance Compliance Supplement for the Section 8 Housing Assistance Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. In addition these certifications are used to provide information for subsidy billings, housing assistance payments, on behalf of families via HUD?s Tenant Rental Assistance Certification System (TRACS). Housing assistance payments shall be paid to the Owner for units under lease for occupancy by families in accordance with the HAP Contract. The housing assistance payment will cover the difference between the Contract Rent and that portion of the rent payable by the Family as determined in accordance with the HUD-established schedules and criteria. Condition: ? Of the first 8 tenant files reviewed, we noted 4 tenant files for which 3rd party income verification was not documented for the recertification. This is a repeat finding. ? Of the first 8 tenant files reviewed, we noted at least one exception for each file tested. Further testing was not deemed necessary. ? We determined that management failed to request housing assistance payments for numerous months during the fiscal year Cause: Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Management failed to properly utilize its software to upload the information necessary for subsidy billings. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Due to the failure to upload subsidy billings via TRACS the Agency did not receive several months of HAP receipts to fund ongoing operations. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly. We also recommend the Housing Authority upload the necessary information to TRACS in order to receive its subsidy funding. Views of Responsible Officials and Planned Corrective Action: The Housing Authority has employed an individual subsequent to year-end to assist management in getting all recertifications up to date. The lightening of the effects from the COVID-19 pandemic have helped the Housing Authority sustain consistent operations and they intend to hire an additional individual to assist in performing tenant recertifications.
2020-003- Determination of Contract Rents, Maintenance of Tenant Files & Failure to Request Housing Assistance Payments on Behalf of Families Condition: Income verification procedures required as a part of the annual recertification have not been performed or not performed sufficiently for the majority of tenants housed as of 12/31/2020. Housing Assistance requests for 2020 have still not all been completed for all properties as of the current date. Corrective Action Planned: Management has employed an additional administrative support employee subsequent to year-end to assist in performing updated annual recertifications for all inaccurate or insufficiently performed recertifications. Quality control review to be performed over all tenant files to determine which to be called in immediately for correction. Management has contracted technical assistance consulting in getting their housing assistance payment requests up-to-date to the current month. Person responsible for corrective action: Larry Pippin, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management expected to have performed a quality control review over all tenant files and correction of all tenant files by 6/30/2022. Management expects to have all monthly HAP requests back up to date by 6/30/2022.
2019-001
As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Former management failed to make the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: The delinquent replacement reserves should be made per the RCC as soon as possible and procedures should be implemented to ensure that all future required deposits are made in a timely manner. Views of Responsible Officials and Planned Corrective Action: Management has made the required reserve deposits in the replacement for reserve accounts for each project subsequent to year-end. Management will continue to make the monthly required deposits for the reserve in accordance with grant program requirements.
Show full finding ▾Hide full finding ▴Department of Housing and Urban Development - Section 8 Housing Assistance Payment Program ALN # 14.195 Material Instance of Noncompliance - Special Tests & Provisions 2020-004 - Reserve Funds for Replacement Criteria: In accordance with its Housing Assistance Payment contract/RAD Conversion Commitment (RCC), the Housing Authority is required to establish and maintain a replacement reserve in an interestbearing account to aid in funding extraordinary maintenance and repair and replacement of capital items in accordance with the RCC. Condition: As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Cause: Former management failed to make the required deposits. Effect: Because the required deposits to the replacement reserve were not made and maintained, the Projects did not adequately escrow balances for the replacement reserve accounts. Questioned Costs: Undetermined. Recommendation: The delinquent replacement reserves should be made per the RCC as soon as possible and procedures should be implemented to ensure that all future required deposits are made in a timely manner. Views of Responsible Officials and Planned Corrective Action: Management has made the required reserve deposits in the replacement for reserve accounts for each project subsequent to year-end. Management will continue to make the monthly required deposits for the reserve in accordance with grant program requirements.
2020-004- Reserve Funds for Replacement Condition: As a result of our audit procedures we determined that while the replacement reserve accounts had been established, the HUD-approved required deposits were not made in accordance with the RCC. Corrective Action Planned: Management is to make the required initial deposit and subsequent required monthly and/or annual deposits in accordance with the RCC. Person responsible for corrective action: Larry Pippin, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Initial deposit has been made as of 8/19/2021 for all 5 properties. Management to make the required monthly deposits to the reserve in accordance with the RCC going forward.
FAC accepted this audit on February 15, 2021 — management decision was due August 15, 2021.
Section III - Findings and Questioned Costs - Major Federal Award Programs Audit Department of Housing and Urban Development - Low Rent Public Housing Program CFDA # 14.850 Material Instance of Noncompliance - Eligibility 2019-001 - Public Housing Tenant Files Questioned Costs: Undetermined THE HOUSING AUTHORITY OF THE CITY OF ATHENS, ALABAMA Cause : Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Criteria : OMB Uniform Guidance Compliance Supplement for the Public and Indian Housing Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. Condition : Of the 40 public housing files tested, we noted 8 tenant files for which 3rd party income verification was not documented for the recertification. Effect : Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which will affect the rental income received by the Housing Authority and can potentially affect their Operating Subsidy calculation for future federal funding. Views of Responsible Officials and Planned Corrective Action : The Housing Authority has employed an individual subsequent to year-end to assist management in getting all recertifications up to date. The effects of the shutdown from the coronavirus pandemic have slowed their progress but they have a good start on the corrective action. The Housing Authority intends to hire an additional individual as soon as their recent hire is trained. Recertifications will be reviewed and corrected for all active tenants of the Housing Authority. Schedule of Findings and Questioned Costs For the Year Ended December 31 2019 Recommendation : We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly. 22
Show full finding ▾Hide full finding ▴Section III - Findings and Questioned Costs - Major Federal Award Programs Audit Department of Housing and Urban Development - Low Rent Public Housing Program CFDA # 14.850 Material Instance of Noncompliance - Eligibility 2019-001 - Public Housing Tenant Files Questioned Costs: Undetermined THE HOUSING AUTHORITY OF THE CITY OF ATHENS, ALABAMA Cause : Lack of adequate staffing due to turnover of personnel and lack of monitoring by management created a significant backlog of recertifications. Criteria : OMB Uniform Guidance Compliance Supplement for the Public and Indian Housing Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. Condition : Of the 40 public housing files tested, we noted 8 tenant files for which 3rd party income verification was not documented for the recertification. Effect : Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which will affect the rental income received by the Housing Authority and can potentially affect their Operating Subsidy calculation for future federal funding. Views of Responsible Officials and Planned Corrective Action : The Housing Authority has employed an individual subsequent to year-end to assist management in getting all recertifications up to date. The effects of the shutdown from the coronavirus pandemic have slowed their progress but they have a good start on the corrective action. The Housing Authority intends to hire an additional individual as soon as their recent hire is trained. Recertifications will be reviewed and corrected for all active tenants of the Housing Authority. Schedule of Findings and Questioned Costs For the Year Ended December 31 2019 Recommendation : We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly. 22
Corrective Action Plan for Findings and Questioned Costs for Year Ended December 31, 2019 Corrective Action Plan Finding: 2019-001- Public Housing Tenant Files Condition: 3rd Party Income verification was not documented for recertifications for 8 out of the 40 Public Housing Files that were tested during the audit. Corrective Action Planned: I am Melinda Reeves, Executive Director and Designated Person to answer this audit finding. I will personally correct the 8 affected tenant files and make the necessary file corrections. Furthermore, All tenant files will be audited for this same compliance with third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. Person responsible for corrective action: Melinda Reeves, Executive Director Telephone: (256) 232-5300 x 8 The Housing Authority of the City of Athens, Alabama Fax: (256) 232-5390 700 5th Avenue, Bldg J. Athens, AL 35611 Anticipated Completion Date: The 8 affected files are scheduled to be corrected by 12/31/2020. The examining and correcting of ALL tenant files will be completed by 12/31/2021. Timely and accurate completion of Annual recertifications will be completed and/or overseen by Melinda Reeves.
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