Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing (Non-major Program) and Section 8 Housing Choice Vouchers Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing (Non-major Program) and Section 8 Housing Choice Vouchers Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing (Non-major Program) and Section 8 Housing Choice Vouchers Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing (Non-major Program) and Section 8 Housing Choice Vouchers Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Public and Indian Housing (Non-major Program) Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Noncompliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and conflict of interest requirements of 24 CFR 982.161, and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Additionally, reimbursements were made to employees in violation of the Authority's adopted personnel policy. There were excessive reimbursements to employees that would be considered outside the normal course of business of the Authority, and housing assistance payments were made to landlords that would be considered a conflict of interest as defined in 24 CFR 982.161. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Alcohol (2 CFR section 200.423) Professional service costs (2 CFR section 200.459) Travel (2 CFR section 200.475) Payments to landlords that represent a conflict of interest (24 CFR 982.161) Known Questioned Costs: $107,736 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance requirement. Housing assistance payments were made to landlords that are defined as a conflict of interest, and approval was granted to reimburse Authority personnel without properly considering the allowability of such costs in accordance with 2 CFR 200. Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs expended federal funds for unallowable items and as such is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. This includes the proper internal control procedures to review invoices in accordance with program requirements, as well as compliance with the Authority's adopted personnel policy. Additionally, the Authority should establish internal controls related to the proper approval of these invoices for payment.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Public and Indian Housing (Non-major Program) Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Noncompliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and conflict of interest requirements of 24 CFR 982.161, and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Additionally, reimbursements were made to employees in violation of the Authority's adopted personnel policy. There were excessive reimbursements to employees that would be considered outside the normal course of business of the Authority, and housing assistance payments were made to landlords that would be considered a conflict of interest as defined in 24 CFR 982.161. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Alcohol (2 CFR section 200.423) Professional service costs (2 CFR section 200.459) Travel (2 CFR section 200.475) Payments to landlords that represent a conflict of interest (24 CFR 982.161) Known Questioned Costs: $107,736 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance requirement. Housing assistance payments were made to landlords that are defined as a conflict of interest, and approval was granted to reimburse Authority personnel without properly considering the allowability of such costs in accordance with 2 CFR 200. Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs expended federal funds for unallowable items and as such is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. This includes the proper internal control procedures to review invoices in accordance with program requirements, as well as compliance with the Authority's adopted personnel policy. Additionally, the Authority should establish internal controls related to the proper approval of these invoices for payment.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Public and Indian Housing (Non-major Program) Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Noncompliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and conflict of interest requirements of 24 CFR 982.161, and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Additionally, reimbursements were made to employees in violation of the Authority's adopted personnel policy. There were excessive reimbursements to employees that would be considered outside the normal course of business of the Authority, and housing assistance payments were made to landlords that would be considered a conflict of interest as defined in 24 CFR 982.161. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Alcohol (2 CFR section 200.423) Professional service costs (2 CFR section 200.459) Travel (2 CFR section 200.475) Payments to landlords that represent a conflict of interest (24 CFR 982.161) Known Questioned Costs: $107,736 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance requirement. Housing assistance payments were made to landlords that are defined as a conflict of interest, and approval was granted to reimburse Authority personnel without properly considering the allowability of such costs in accordance with 2 CFR 200. Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs expended federal funds for unallowable items and as such is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. This includes the proper internal control procedures to review invoices in accordance with program requirements, as well as compliance with the Authority's adopted personnel policy. Additionally, the Authority should establish internal controls related to the proper approval of these invoices for payment.
Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers and Public and Indian Housing (Non-major Program) Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Noncompliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and conflict of interest requirements of 24 CFR 982.161, and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Additionally, reimbursements were made to employees in violation of the Authority's adopted personnel policy. There were excessive reimbursements to employees that would be considered outside the normal course of business of the Authority, and housing assistance payments were made to landlords that would be considered a conflict of interest as defined in 24 CFR 982.161. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Alcohol (2 CFR section 200.423) Professional service costs (2 CFR section 200.459) Travel (2 CFR section 200.475) Payments to landlords that represent a conflict of interest (24 CFR 982.161) Known Questioned Costs: $107,736 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance requirement. Housing assistance payments were made to landlords that are defined as a conflict of interest, and approval was granted to reimburse Authority personnel without properly considering the allowability of such costs in accordance with 2 CFR 200. Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs expended federal funds for unallowable items and as such is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. This includes the proper internal control procedures to review invoices in accordance with program requirements, as well as compliance with the Authority's adopted personnel policy. Additionally, the Authority should establish internal controls related to the proper approval of these invoices for payment.
2023-002 (Significant Deficiency) – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR section 200.438, costs for entertainment including social activities and any associated costs are unallowable. The “Basic Guidelines” section of 2 CFR Part 230, Attachment B Paragraph 8 requires charges to grants for salaries and wages to be based on documented payrolls approved by the Organization. Condition: Food for an employee Christmas Party was included in the population of expenses allocated to the grant. One payroll timesheet tested was missing the approval signature. Cause: Management oversight Effect: The Organization charged unallowable expenses and a payroll expense that was missing approval documentation to the grant. Context: As part of the single audit testing, 40 transactions were selected for testing. One invoice tested was for food costs for a Christmas Party. This is considered unallowable costs as it is costs for a social activity. One payroll timesheet tested was missing the approval signature. Questioned Costs: Immaterial Repeat Finding: No Recommendation: The Organization should review their policies and procedures for allocating expenses to grants and only charge allowable expenses and ensure that all expenses charged are properly approved and the approval documentation is maintained. View of Responsible Officials: Management agrees with the recommendation and will review their procedures for allocating expenses to grants to ensure only allowable expenses are charged to the grant and all expenses are properly approved and the approval documentation is maintained.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Alcoholic beverages (2 CFR section 200.423) Meals (2 CFR section 200.438) Known Questioned Costs: $1,260 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
2023-002 (Significant Deficiency) – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR section 200.438, costs for entertainment including social activities and any associated costs are unallowable. The “Basic Guidelines” section of 2 CFR Part 230, Attachment B Paragraph 8 requires charges to grants for salaries and wages to be based on documented payrolls approved by the Organization. Condition: Food for an employee Christmas Party was included in the population of expenses allocated to the grant. One payroll timesheet tested was missing the approval signature. Cause: Management oversight Effect: The Organization charged unallowable expenses and a payroll expense that was missing approval documentation to the grant. Context: As part of the single audit testing, 40 transactions were selected for testing. One invoice tested was for food costs for a Christmas Party. This is considered unallowable costs as it is costs for a social activity. One payroll timesheet tested was missing the approval signature. Questioned Costs: Immaterial Repeat Finding: No Recommendation: The Organization should review their policies and procedures for allocating expenses to grants and only charge allowable expenses and ensure that all expenses charged are properly approved and the approval documentation is maintained. View of Responsible Officials: Management agrees with the recommendation and will review their procedures for allocating expenses to grants to ensure only allowable expenses are charged to the grant and all expenses are properly approved and the approval documentation is maintained.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Alcoholic beverages (2 CFR section 200.423) Meals (2 CFR section 200.438) Known Questioned Costs: $1,260 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
ACTIVITIES ALLOWED OR UNALLOWED, ALLOWABLE COSTS/COST PRINCIPLES - VARIOUS Partial repeat of finding 2022-005 Finding Type: Material Weakness in Internal Controls over Compliance, Material Noncompliance ALN/CSFA and Program Title: 93.676 - Unaccompanied Alien Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Liberty Wilderness Crossroads Camp Contract Number: 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR Part 200 of the Uniform Guidance, costs should be allocated in the accounting system among grants and should be properly supported. Per the Organization's policies and procedures, certain costs that benefit all programs should be allocated using allocation percentages that are calculated semi-annually. Under 2 CFR 200.438 of the Uniform Guidance, "Costs of entertainment, including amusement, diversion, and social activities and any associated costs (such as gifts), are unallowable unless they have a specific and direct programmatic purpose and are included in a federal award." Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The auditor tested 60 program expenses and noted the following: 1. For 5 expenses, the wrong allocation percentages were used to allocate costs for the period or the Organization was unable to provide support or replicate how costs were allocated. 2. For 6 credit card expenses, the Organization did not have adequate supporting documentation. 3. For 4 credit card expenses, the total of the charges identified by the Organization do not agree to the expense recorded. 4. For 2 expenses, the costs are considered to be unallowable entertainment costs. This was not a statistically valid sample. Cause: 1. Inadequate management review of allocations used for the costs and/or inadequate support for the allocation of the costs. 2. Management approval of credit card charges that are not supported by receipts or other documentation, or the Organization not maintaining the supporting documentation. 3. Difficulties with the credit card company where the Organization could not reconcile the costs in the statement to those that the employees were coding, and differences were typically coded to travel expenses. 4. Inadequate management review of costs that are allowable vs. unallowable for the program. Effect: Incorrectly allocated, unsupported, and unallowable costs were charged to the program, which could result in the grantor requiring repayment. Questioned Costs: Known questioned costs total $21,240, determined by calculating the difference between the costs allocated to the program and the costs that should have been allocated to the program using the allocation percentages in effect at the time the expenses occurred, and by totaling unsupported and unallowable costs. Likely questioned costs total $172,742, determined by dividing the known questioned costs by the total of the sample and applying the error rate to the population of expenditures. Recommendation: We recommend management more specifically review the allocations used when reviewing costs that are allocated among programs, that management ensure all credit card charges are adequately supported and not charge unsupported costs to federal awards, and that management gain a better understanding of allowable and unallowable costs for the program and ensure unallowable costs are not charged to the program. Views of Responsible Officials and Planned Corrective Actions: See management's response and Corrective Action Plan on page 57.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance ? B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority?s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: ? Alcoholic beverages (2 CFR section 200.423) ? Training and education costs for a non-employee (2 CFR section 200.473) ? Meals (2 CFR section 200.438) Known Questioned Costs: $3,118 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principle type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principle requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principle type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance ? B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority?s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: ? Alcoholic beverages (2 CFR section 200.423) ? Training and education costs for a non-employee (2 CFR section 200.473) ? Meals (2 CFR section 200.438) Known Questioned Costs: $3,118 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principle type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principle requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principle type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.