SPOKANE INDIAN HOUSING AUTHORITYTribal Government

2021-001 - Federal Major Program Report Submission - Significant Deficiency Funding agency: Department of Housing and Urban Development Title: Indian Housing Block Grant CFDA number: 14.867 Award year and number; 2021. 55IH314900 CONDITION The Spokane Indian Housing Authority failed to submit the September 30, 2021 report to the Federal Clearing House as well as the HUD REAC subsystem in a timely fashion. CRITERIA OMB guidance M-20-17 and PIH Notices 2020-13 and 2020-33. CAUSE The auditors assisted the Housing Authority in the preparation financial statements. There were adjustments which were needed to be made to the general ledger by the Housing Authority at year end which had not been made timely and which further delayed the preparation of the financial statements in order to meet the report submission deadline. EFFECT The Housing Authority is not in compliance with the OMB and HUD regulations. RECOMMENDATION We recommend that management develop policies and procedures that ensure financial records are ready for audit in a timely manner so that future fiscal periods' financial reports can be submitted prior to the established deadline. RESPONSE The SFCHA like many other entities was adversely affected by the Pandemic during this audit cycle but also experienced a delay in contracting and conducting those audits as well as employee turnover. We anticipate meeting the REAC audit submission for the FY2022 year and the Federal Clearing Housing for the FY2022 year.

2021-002 - Reports requiring amendments due to report not matching accounting system - Significant Deficiency Funding agency: Department of Housing and Urban Development Title: Indian Housing Block Grant CFDA number: 14.867 Award year and number; 2021. 55IH314900 CONDITION We reviewed and tested internal controls over compliance and detected a control deficiency over reporting that caused noncompliance with reporting requirements. Reports have been corrected to match system files. CRITERIA Effective internal controls over reporting requires submission requirement and sufficient documentation in order to comply with federal regulations. The internal controls over reporting should be properly designed and should operate effectively to provide assurance of meeting compliance requirements. Internal controls require all financial reports to be supported with underlying accounting records and submitted to the federal agency within the specified due dates. CAUSE The Authority changed accounting system and contributed to the deficiency. EFFECT The internal control deficiency exposes the Authority to higher risk of noncompliance with federal award requirements. The agency may impose suspension of award funds for late submission of reports. RECOMMENDATION We recommend that the Authority strengthen the internal control structure to ensure financial reports meet the reporting requirements and implement a checklist to track and monitor all grant reporting requirements. RESPONSE First, the financial reports will be included in the overall list of reports and due dates that will be in Microsoft Teams Planner. Secondly, we will develop a step by step procedures which identifies how to create these reports and explains what each number is. These procedures will be tested internally by other admin staff who have not done these reports before. We will also save all supporting documentation and worksheets that will explain how and when we arrived at the numbers on that financial report.

Exemption for Indian Tribes

Incomplete income documentation or inaccurate income determinations were observed in six of the nineteen occupancy files reviewed. The lack of recertification documentation made it difficult to assess whether the monthly adjusted income and rental payments were accurately determined, and whether tenants were charged more than 30% of their adjusted income. Required source documentation were not consistently maintained in tenant files. Source documentation used for income recertifications were not always up to date. The required methods to determine income was unclear. Section 203(a) requires recipient to develop written policies governing rents and homebuyer payments charged for dwelling units assisted under this Act, including the methods by which such rents and homebuyer payments are determined. In addition, monthly rent for dwelling units assisted under the Act may not exceed 30% of a family's monthly adjusted income. 24 CFR 1000.10 of NAHASDA defines the three methods of calculating annual income or adjusted gross income (HUD Section 8, Census and IRS method). 24 CFR 1000.128 requires the recipient verify that family is income eligible based on anticipated annual income. The family is required to provide documentation to verify this determination. The recipient is required to maintain the documentation on which the determination of eligibility is based.A procedure does not exist to ensure that policies regarding calculating income and obtaining source documentation are consistently followed. In addition, a clear income determination policy is not in place to ensure that non-low-income households do not receive the same benefit as low-income households. Without consistent application of policy and procedures, particularly as it applies to income verification and adjusted income calculations, tenants rent or rental assistance grant amounts may not be calculated correctly, or ineligible tenants may occupy the units. Inability to determine program compliance could result in questioned and disallowed costs. In addition, this may result in complaints and litigation by tenants. Review annual income documentation for all tenants who were initially assisted in the Low-Income Rental and Homeownership programs. Determine whether assisted households were income eligible at program entry. Review the most recent annual income recertification for current tenants and obtain complete and conclusive income documentation where needed. If any families are determined to have been non-low-income at the time of program entry, or have subsequently non-low-income, provide documentation demonstrating IHBG assistance is being provided in accordance with 24 CFR 1000.110. Review and amend the Housing Authority's Admissions and Occupancy Policy to ensure the current policy and practices comply with regulations and statute and specifically address: the method that will be used to calculate adjusted income and what source documentation is required to substantiate income and expenses, How the need for housing non-low-income families and the amount of assistance provided to them will be determined; and assure that no more than 10 percent of the amount planned for the program year will be used to assist families between 80 to 100 percent of the median income without HUD approval. Implement a procedure for reviewing tenant files to determine that all source documents are obtained at initial income determination and recertification. Provide training to staff responsible for income eligibility and tenant recertifications.

The Housing Authority operates a NAHASDA funded program called the IHA FInanced Home Loan Program but does not have a policy and/or procedure established for this program. There are two homebuyers that have had their homes financed through this program. Both homebuyers initially were granted $50,000 towards the purchase of their homes. The homebuyers were not able to acquire outside financing, and as a result, SIHA financed the balance of the loan. Section 203(d) of NAHASDA states each recipient shall develop written policies governing the eligibility, admission, and occupancy of families for housing assisted with grant amounts provided under this Act. A written policy and procedure is not available to provide staff guidance regarding implementation and operation of the IHA Financed Home Loan Program. Without a written policy and procedure to implement and operate the IHA Financed Home Loan Program, there are increased risks of misused grant funds or disputes from participants regarding consistency in how the program is executed. Develop and implement a written policy and procedure for the operation of the IHA Financed Home Loan Program.