Municipality of ComerioLocal Government

FINDING NUMBER 2024-002 REQUIREMENT REPORTING TYPE OF FINDING MATERIAL WEAKNESS FEDERAL PROGRAM 14.871 – SECTION 8 HOUSING CHOICE VOUCHERS CONDITION The Municipality did not submit or file the required FASS PH financial report for the fiscal year ended June 30, 2024. At the completion of the audit, the report remained outstanding and had not been uploaded to the FASS PH system, resulting in noncompliance with HUD’s reporting requirements. CRITERIA Entities administering the Section 8 Housing Choice Voucher Program (AL 14.871) must submit annual financial information to the U.S. Department of Housing and Urban Development (HUD) through the Financial Assessment Subsystem – Public Housing (FASS PH). This requirement is established under: • 2 CFR 200.327–200.328 (Uniform Guidance reporting requirements) • HUD Uniform Financial Reporting Standards (UFRS) • HUD Public Housing Assessment System (PHAS) – FASS PH requirements • Applicable HUD notices and guidance for FY 2024 These regulations require timely submission of complete and accurate financial data to allow HUD to evaluate the financial condition and compliance performance of the Municipality’s Housing Choice Voucher Program. CAUSE The failure to submit the FASS PH report resulted from insufficient internal controls over the financial reporting process. Contributing factors included: • Lack of a formal monitoring process to track HUD reporting deadlines • Inadequate supervisory review of required submissions • Limited staff knowledge of HUD’s UFRS and FASS PH reporting procedures EFFECT Non-compliance may result in HUD administrative actions, negative impact on the municipality’s financial assessment score, delays or interruptions in federal funding and potential for increased oversight or monitoring by HUD. QUESTIONED COST None RECOMMENDATION The municipality should establish and document formal internal controls to ensure timely preparation and submission of the FASS PH report. Assign responsibility to specific personnel and implement a compliance calendar for HUD reporting deadlines. Provide training to financial staff on HUD reporting requirements, UFRS, and the FASS PH system. Implement a supervisory review process to verify completeness and accuracy before submission. Submit the outstanding FASS PH report as soon as possible, if HUD still permits late filing. PRIOR YEAR FINDING None VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION The Municipality of Comerío made a contract with an auditing firm to work on the reports and submission of the FASS-PH financial report compliance for the years in which the reports were not submitted. Furthermore, instructions were given for the HUD Coordinator to monitor the delivery of reports by the contracted auditing firm and to ensure that the contract for this service is finalized. Personnel in charge: Brenda L. Reyes Rivera, HUD Coordinator Compliance period: April 30, 2026

SECTION III. - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS FINDING 2019-002 REQUIREMENT Special Test - Selection from the Section 8 Waiting List CRETERIA 24 CFR 982.54(d)(1) establishes that the PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. This includes selection and admission of applicants from the PHA waiting list, including any PHA admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the PHA waiting list. CONDITION The applicants were not selected in accordance with the cities selection policies in the administrative plan. QUESTIONED COSTS NONE CAUSE The Municipality lacked the proper internal controls over the management of the waiting list. EFFECT The PHA did not follow their policies when selecting applicants for admission from the waiting list. RECOMMENDATION The Municipality should select applicants from the waiting list following the method specified in the administrative plan must ensure and the method for selecting applicants leaves a clear audit trail that can be used to verify that each applicant has been selected in accordance with the method specified in the administrative plan.