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Audit firm report identifies $2.8 million disallowed transfer; commissioners request auditor briefing
Summary
A CliftonLarsonAllen review of HACM accounts flagged a $2.8 million transfer from the Section 8 Housing Choice Voucher program to the central office cost center as disallowed. Commissioners requested a meeting with the audit firm to review findings and next steps.
A report produced by CliftonLarsonAllen and presented to commissioners at the June 11 meeting identified an approximately $2.8 million transfer from HACM’s Section 8 program to its central office cost center that the auditors characterized as disallowed. Commissioners responded with questions and asked staff to arrange a meeting with the auditors to review the findings and discuss governance and remedial steps.
Brad (staff) summarized the report as a 100% transaction review of the voucher program covering multiple years; commissioners said the findings are serious because they indicate multi‑year transfers that should not have been allowed under HUD program rules. Ken Barbot said draft copies had been shared with HUD (QAD and the field office) and that the final report had been sent to HUD as well.
Commissioners discussed internal controls and the need for segregation of duties, written authority levels and auditor briefings. Commissioner Gotzler asked that CliftonLarsonAllen be invited to meet with the commission or an appropriate committee to answer questions; the board agreed to request that briefing. Ken Barbot and staff said they will coordinate with legal counsel to determine whether parts of the discussion require a closed‑session briefing on personnel or privileged matters.
Why it matters: Disallowed uses of federal program funds can trigger repayment, HUD sanctions, and require negotiated resolutions with HUD. Staff told commissioners the report and related materials were already under HUD review.
Board direction: staff will request CliftonLarsonAllen come before the commission or a committee to present findings and answer commissioner questions; staff will confer with legal counsel about closed‑session requirements.
