We audited Salish and Kootenai Housing Authority (Authority) as part of our review of the Office of Native American Programs' guidance on calculating program income for the United States Housing Act of 1937 (1937 Act) housing projects assisted by the Native American Housing Assistance and Self Determination Act of 1996 (NAHASDA). The objective of the audit was to determine whether the Authority calculated program income for NAHASDA-assisted 1937 Act properties in accordance with applicable U.S. Department of Housing and Urban Development (HUD) guidance, regulations, and requirements and to observe uses of revenue from NAHASDA-assisted 1937 Act properties.
The Authority did not have adequate accounting policies and procedures for allocating income from 1937 Act properties receiving Indian Housing Block Grant (Block Grant) program assistance between its general fund and Block Grant programs. It failed to track Block Grant rehabilitation or capital expenses for each property and recognize program income from substantially rehabilitated properties. It also miscalculated the amount of NAHASDA revenue because it included units converted to non-NAHASDA tax credit units in its average expense level calculation. As a result, more than $184,000 in low-rent housing receipts were inappropriately excluded from Block Grant affordable housing funds during the period October 1, 2002, through December 31, 2006, and should be reclassified. These conditions occurred because management created policies and procedures for determining and administering program income that did not comply with applicable guidance and regulations.