Audit 373879

2024-003 Internal Controls System Over Allowable Costs and Allowed Activities. – U.S. Department of Housing and Urban Development, Housing Opportunities for Persons with AIDS, Assistance Listing Number 14.241, Passed Through the City of Las Vegas, Nevada. Criteria: As defined in 2 CFR 200.303, auditee is required to maintain a system of internal control over compliance designed to provide reasonable assurance that federal award transactions executed are in compliance with the terms and conditions of the federal award. Funds utilized under the Housing Opportunities for Persons with AIDS program are required to be expended on costs consistent with those outlined in 2 CRF 200 Subpart E – Cost Principles, and within the core service categories outlined in the grant agreement. Condition: For one pay period selected for testing, two employees charged to the grant did not have an approved grant time sheet which assigns the appropriate time worked by employees to be allocated to the grant. Cause: Internal controls over payroll allocations was not performed consistently to ensure all payroll allocations and related expenses were properly reviewed. Context: Management failed to design and implement consistent internal controls to address the risk of improper payroll amounts being allocated to the grant. Effect: Failure to design and implement controls over the approved payroll allocations could result in the grant being overcharged. Repeat Finding: No Recommendation: We recommend management design and implement a system of internal controls whereby a review of costs and activities and the related supporting schedules being submitted for reimbursement are reviewed on a consistent basis and management ensures proper documentation of this review is maintained to support the performance of the control. Views of Responsible Officials and Planned Corrective Actions: For one of the pay periods selected for testing, two employees charged to the grant did not have an approved grant time sheet which assigns the appropriate time worked by employees to be allocated to the grant. Internal controls over payroll allocations were not performed consistently to ensure all payroll allocations and related expenses were properly reviewed. Management failed to design and implement consistent internal controls to address the risk of improper payroll amounts being allocated to the grant. Failure to design and implement controls over the approved payroll allocations could result in the grant being overcharged. Management intends to put in place additional training for case managers to identify eligibility of clients and ensure proper backup is submitted. Supervisors will ensure all proper back up and supporting documents are included in the case file before submitting.