Audit 25902

Criteria: According to the Cost Principles outlined in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), bad debts arising from uncollectable accounts and other claims are unallowable expenditures under federal programs. Condition/Context: The County charged $17,733 of bad debts to the Public and Indian Housing program during the year, for which the County received reimbursement from the federal funding agency. Known Questioned Costs Exceeding $25,000: None. Cause and Effect: Monitoring controls did not identify unallowable expenditures being charged to the Public and Indian Housing program. As such, the request for reimbursement submitted to the funding agency improperly included unallowable charges. Auditor?s Recommendations: The County should notify the federal funding agency about this particular instance of noncompliance and take corrective measures, as necessary, to reimburse the agency for the unallowable expenditures. Management?s Response: The Housing Authority and Finance Division will work with the U.S. Department of Housing and Urban Development to return any funds reimbursed to the County related to the unallowable costs. The deficiency has been resolved, the County did not request reimbursement from HUD for the unallowable costs. The Finance Director has made changes to the County's year-end accrual process to ensure the error will not occur again in future adjustments.

Criteria: According to the Cost Principles outlined in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), bad debts arising from uncollectable accounts and other claims are unallowable expenditures under federal programs. Condition/Context: The County charged $17,733 of bad debts to the Public and Indian Housing program during the year, for which the County received reimbursement from the federal funding agency. Known Questioned Costs Exceeding $25,000: None. Cause and Effect: Monitoring controls did not identify unallowable expenditures being charged to the Public and Indian Housing program. As such, the request for reimbursement submitted to the funding agency improperly included unallowable charges. Auditor?s Recommendations: The County should notify the federal funding agency about this particular instance of noncompliance and take corrective measures, as necessary, to reimburse the agency for the unallowable expenditures. Management?s Response: The Housing Authority and Finance Division will work with the U.S. Department of Housing and Urban Development to return any funds reimbursed to the County related to the unallowable costs. The deficiency has been resolved, the County did not request reimbursement from HUD for the unallowable costs. The Finance Director has made changes to the County's year-end accrual process to ensure the error will not occur again in future adjustments.