SCHERTZ HOUSING AUTHORITY

Finding 2025-003 ALN Number: 14.871 Name of Federal Agency: U.S. Department of Housing & Urban Development Type of Finding – Single Audit Material Weakness in Internal Control Over Financial Reporting

Criteria: HUD requires that public housing authorities accurately report program activity in the Voucher Management System (VMS) and reconcile these submissions to the general ledger (GL) on a monthly basis. The Uniform Guidance (2 CFR 200.303) requires non-federal entities to establish and maintain effective internal control over federal awards, including accurate financial reporting and reconciliation processes. Port HAP revenue and expense is not being tracked properly in the GL.

Condition: The Schertz Housing Authority did not properly track and reconcile its monthly VMS submissions to the general ledger. As a result, there were material discrepancies between the VMS-reported data and the HCV program’s financial statements, specifically related to income and restricted equity.

Cause and Effect: The Authority did not follow their formal procedures to ensure that VMS submissions were reconciled to the general ledger each month. Material discrepancies existed in the HCV program’s financial statements, affecting reported income and restricted equity. Additionally, these discrepancies contributed to the Authority experiencing a funding shortfall in the HCV program by year-end, increasing the risk of questioned costs and noncompliance with HUD requirements.

Recommendation: We recommend that the Schertz Housing Authority should work with their fee accountant to ensure that the financial records agree to the VMS submissions to the general ledger.

View of Responsible Officials and Planned Corrective Action: We are working with our HUD field office to correct our VMS reporting. We are also working with our fee accountant and have switched our software to HAPPY so we can get better reporting.

Responsible Official: Cristi LaJeunesse, Executive Director

ALN Number: 14.871 Name of Federal Agency: U.S. Department of Housing & Urban Development Type of Finding – Single Audit Material Weakness in Internal Control Over Financial Reporting Criteria: HUD requires that public housing authorities accurately report program activity in the Voucher Management System (VMS) and reconcile these submissions to the general ledger (GL) on a monthly basis. The Uniform Guidance (2 CFR 200.303) requires non-federal entities to establish and maintain effective internal control over federal awards, including accurate financial reporting and reconciliation processes. Condition The Schertz Housing Authority did not properly track and reconcile its monthly VMS submissions to the general ledger. As a result, there were material discrepancies between the VMS-reported data and the HCV program’s financial statements, specifically related to income and restricted equity. Cause and Effect: The Authority did not follow their formal procedures to ensure that VMS submissions were reconciled to the general ledger each month. Material discrepancies existed in the HCV program’s financial statements, affecting reported income and restricted equity. Additionally, these discrepancies contributed to the Authority experiencing a funding shortfall in the HCV program by year-end, increasing the risk of questioned costs and noncompliance with HUD requirements. Recommendation: We recommend that the Schertz Housing Authority should work with their fee accountant to ensure that the financial records agree to the VMS submissions to the general ledger. View of Responsible Officials and Planned Corrective Action: We are working with our HUD field office to correct our VMS reporting. Responsible Official: Cristi LaJeunesse, Executive Director