Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement
Repeat Findings: No
Criteria:
For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public
Housing Agency (PHA) must require the owner to correct any life threatening HQS deficiencies
within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or
within a specified PHA-approved extension (24 CFR sections 982.158(d) and 982.404).
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where a life threatening HQS
deficiency was not corrected within 24 hours of the inspection. The City’s Housing Authority had
approved an extension for the issue to be corrected, but no documentation of this extension was
kept in the tenant file.
Cause:
The City does not have a consistent process to document extensions for HQS deficiencies.
Effect or Potential Effect:
The City would fail to comply with the U.S. Department of Housing and Urban Development’s
(HUD) HQS Enforcement guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implement a policy to properly document HQS deficiency correction
extensions within the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: Yes, 2023-003
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial
institutions in the form required by the U.S. Department of Housing and Urban Development
(HUD). The agreements serve as safeguards for Federal funds and provide third party rights to
HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing
account (24 CFR section 982.156).
Condition and Context:
The City did not enter into a depository agreement with their financial institution until April 17,
2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository
agreement requirement. This non-compliance was brought to the attention of management during
their 2024 fiscal year and was corrected soon after.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement
expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a system to track the expiration of the agreement to avoid
lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with HUD Reasonable Rent Requirement
Repeat Findings: No
Criteria:
The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also,
the PHA must determine reasonable rent during the term of the contract (a) before any increase in
the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the
published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must
maintain records to document the basis for the determination that rent to owner is a reasonable rent
(initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15),
982.158(f)(7), and 982.507).
Condition and Context:
We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness
documentation was missing from the tenant file and therefore we could not determine if rent
reasonableness was properly completed or reviewed.
Cause:
The City does not have an effective policy in place to ensure proper documentation of rent
reasonableness.
Effect or Potential Effect:
The City would fail to comply with HUD’s reasonable rent guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a policy to track documents necessary for a tenant’s
evaluation and annual re-evaluation to ensure all are properly documented in the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Internal Control Finding - Eligibility
Repeat Finding: No
Criteria:
In accordance with 2 CFR §200.303: The non-Federal entity must establish and maintain effective
internal controls over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award.
The PHA must have sufficient internal controls in place to ensure the proper administration of
HUD funding.
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where the tenant affidavit for rental
assistance benefits was not signed by a housing specialist. Therefore, these two selections did not
have evidence that the tenant information was reviewed.
Cause:
The City does not have a proper policy in place to ensure documentation of review procedures.
Effect or Potential Effect:
The City could potentially create a HAP contract with a tenant that is ineligible for rental
assistance.
Questioned Costs:
Unknown.
Recommendation:
We recommend that tenant evaluations and annual re-evaluations are reviewed by a supervisor
prior to creating a HAP contract or renewing an existing contract to ensure tenant files are properly
reviewed and documented.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement
Repeat Findings: No
Criteria:
For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public
Housing Agency (PHA) must require the owner to correct any life threatening HQS deficiencies
within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or
within a specified PHA-approved extension (24 CFR sections 982.158(d) and 982.404).
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where a life threatening HQS
deficiency was not corrected within 24 hours of the inspection. The City’s Housing Authority had
approved an extension for the issue to be corrected, but no documentation of this extension was
kept in the tenant file.
Cause:
The City does not have a consistent process to document extensions for HQS deficiencies.
Effect or Potential Effect:
The City would fail to comply with the U.S. Department of Housing and Urban Development’s
(HUD) HQS Enforcement guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implement a policy to properly document HQS deficiency correction
extensions within the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: Yes, 2023-003
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial
institutions in the form required by the U.S. Department of Housing and Urban Development
(HUD). The agreements serve as safeguards for Federal funds and provide third party rights to
HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing
account (24 CFR section 982.156).
Condition and Context:
The City did not enter into a depository agreement with their financial institution until April 17,
2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository
agreement requirement. This non-compliance was brought to the attention of management during
their 2024 fiscal year and was corrected soon after.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement
expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a system to track the expiration of the agreement to avoid
lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with HUD Reasonable Rent Requirement
Repeat Findings: No
Criteria:
The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also,
the PHA must determine reasonable rent during the term of the contract (a) before any increase in
the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the
published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must
maintain records to document the basis for the determination that rent to owner is a reasonable rent
(initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15),
982.158(f)(7), and 982.507).
Condition and Context:
We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness
documentation was missing from the tenant file and therefore we could not determine if rent
reasonableness was properly completed or reviewed.
Cause:
The City does not have an effective policy in place to ensure proper documentation of rent
reasonableness.
Effect or Potential Effect:
The City would fail to comply with HUD’s reasonable rent guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a policy to track documents necessary for a tenant’s
evaluation and annual re-evaluation to ensure all are properly documented in the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Internal Control Finding - Eligibility
Repeat Finding: No
Criteria:
In accordance with 2 CFR §200.303: The non-Federal entity must establish and maintain effective
internal controls over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award.
The PHA must have sufficient internal controls in place to ensure the proper administration of
HUD funding.
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where the tenant affidavit for rental
assistance benefits was not signed by a housing specialist. Therefore, these two selections did not
have evidence that the tenant information was reviewed.
Cause:
The City does not have a proper policy in place to ensure documentation of review procedures.
Effect or Potential Effect:
The City could potentially create a HAP contract with a tenant that is ineligible for rental
assistance.
Questioned Costs:
Unknown.
Recommendation:
We recommend that tenant evaluations and annual re-evaluations are reviewed by a supervisor
prior to creating a HAP contract or renewing an existing contract to ensure tenant files are properly
reviewed and documented.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement
Repeat Findings: No
Criteria:
For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public
Housing Agency (PHA) must require the owner to correct any life threatening HQS deficiencies
within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or
within a specified PHA-approved extension (24 CFR sections 982.158(d) and 982.404).
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where a life threatening HQS
deficiency was not corrected within 24 hours of the inspection. The City’s Housing Authority had
approved an extension for the issue to be corrected, but no documentation of this extension was
kept in the tenant file.
Cause:
The City does not have a consistent process to document extensions for HQS deficiencies.
Effect or Potential Effect:
The City would fail to comply with the U.S. Department of Housing and Urban Development’s
(HUD) HQS Enforcement guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implement a policy to properly document HQS deficiency correction
extensions within the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: Yes, 2023-003
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial
institutions in the form required by the U.S. Department of Housing and Urban Development
(HUD). The agreements serve as safeguards for Federal funds and provide third party rights to
HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing
account (24 CFR section 982.156).
Condition and Context:
The City did not enter into a depository agreement with their financial institution until April 17,
2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository
agreement requirement. This non-compliance was brought to the attention of management during
their 2024 fiscal year and was corrected soon after.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement
expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a system to track the expiration of the agreement to avoid
lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with HUD Reasonable Rent Requirement
Repeat Findings: No
Criteria:
The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also,
the PHA must determine reasonable rent during the term of the contract (a) before any increase in
the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the
published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must
maintain records to document the basis for the determination that rent to owner is a reasonable rent
(initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15),
982.158(f)(7), and 982.507).
Condition and Context:
We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness
documentation was missing from the tenant file and therefore we could not determine if rent
reasonableness was properly completed or reviewed.
Cause:
The City does not have an effective policy in place to ensure proper documentation of rent
reasonableness.
Effect or Potential Effect:
The City would fail to comply with HUD’s reasonable rent guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a policy to track documents necessary for a tenant’s
evaluation and annual re-evaluation to ensure all are properly documented in the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Internal Control Finding - Eligibility
Repeat Finding: No
Criteria:
In accordance with 2 CFR §200.303: The non-Federal entity must establish and maintain effective
internal controls over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award.
The PHA must have sufficient internal controls in place to ensure the proper administration of
HUD funding.
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where the tenant affidavit for rental
assistance benefits was not signed by a housing specialist. Therefore, these two selections did not
have evidence that the tenant information was reviewed.
Cause:
The City does not have a proper policy in place to ensure documentation of review procedures.
Effect or Potential Effect:
The City could potentially create a HAP contract with a tenant that is ineligible for rental
assistance.
Questioned Costs:
Unknown.
Recommendation:
We recommend that tenant evaluations and annual re-evaluations are reviewed by a supervisor
prior to creating a HAP contract or renewing an existing contract to ensure tenant files are properly
reviewed and documented.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement
Repeat Findings: No
Criteria:
For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public
Housing Agency (PHA) must require the owner to correct any life threatening HQS deficiencies
within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or
within a specified PHA-approved extension (24 CFR sections 982.158(d) and 982.404).
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where a life threatening HQS
deficiency was not corrected within 24 hours of the inspection. The City’s Housing Authority had
approved an extension for the issue to be corrected, but no documentation of this extension was
kept in the tenant file.
Cause:
The City does not have a consistent process to document extensions for HQS deficiencies.
Effect or Potential Effect:
The City would fail to comply with the U.S. Department of Housing and Urban Development’s
(HUD) HQS Enforcement guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implement a policy to properly document HQS deficiency correction
extensions within the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: Yes, 2023-003
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial
institutions in the form required by the U.S. Department of Housing and Urban Development
(HUD). The agreements serve as safeguards for Federal funds and provide third party rights to
HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing
account (24 CFR section 982.156).
Condition and Context:
The City did not enter into a depository agreement with their financial institution until April 17,
2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository
agreement requirement. This non-compliance was brought to the attention of management during
their 2024 fiscal year and was corrected soon after.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement
expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a system to track the expiration of the agreement to avoid
lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with HUD Reasonable Rent Requirement
Repeat Findings: No
Criteria:
The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also,
the PHA must determine reasonable rent during the term of the contract (a) before any increase in
the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the
published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must
maintain records to document the basis for the determination that rent to owner is a reasonable rent
(initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15),
982.158(f)(7), and 982.507).
Condition and Context:
We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness
documentation was missing from the tenant file and therefore we could not determine if rent
reasonableness was properly completed or reviewed.
Cause:
The City does not have an effective policy in place to ensure proper documentation of rent
reasonableness.
Effect or Potential Effect:
The City would fail to comply with HUD’s reasonable rent guidelines.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a policy to track documents necessary for a tenant’s
evaluation and annual re-evaluation to ensure all are properly documented in the tenant files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Internal Control Finding - Eligibility
Repeat Finding: No
Criteria:
In accordance with 2 CFR §200.303: The non-Federal entity must establish and maintain effective
internal controls over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award.
The PHA must have sufficient internal controls in place to ensure the proper administration of
HUD funding.
Condition and Context:
We tested a sample of 25 HAP contracts and found 2 tenants where the tenant affidavit for rental
assistance benefits was not signed by a housing specialist. Therefore, these two selections did not
have evidence that the tenant information was reviewed.
Cause:
The City does not have a proper policy in place to ensure documentation of review procedures.
Effect or Potential Effect:
The City could potentially create a HAP contract with a tenant that is ineligible for rental
assistance.
Questioned Costs:
Unknown.
Recommendation:
We recommend that tenant evaluations and annual re-evaluations are reviewed by a supervisor
prior to creating a HAP contract or renewing an existing contract to ensure tenant files are properly
reviewed and documented.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.
Significant Deficiency in Internal Controls Over Financial Reporting – Payroll
Repeat Findings: No
Criteria:
The City’s payroll department should ensure all timesheets are approved by appropriate supervisor
before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing
errors, fraud, or misuse of resources.
Condition and Context:
We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four
pay periods and found that 3 employees selected for testing did not have properly approved
timesheets.
Effect or Potential Effect:
The City could potentially allow for unapproved time to be paid to employees.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City review their internal controls processes and procedures over payroll
processing to ensure all timesheets are properly approved before payroll is processed.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.