Finding Text
Finding 2022-002 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, CFDA #14.135
Statement of Condition: During the year ended December 31, 2022, supporting documentation was not available for all requested disbursements.
Criteria: The HUD Handbook 4370.2 REV-1, Chapter 2 Section 12 states a request for a check must have supporting documentation (i.e., invoice itemizing amount requested with an authorized signature) in order for approval to be obtained to make the disbursement. Checks must be approved by an individual authorized to approve checks.
Effect: Noncompliance with HUD regulations.
Cause: Management oversight.
Context: A sample of forty cash disbursements totaling $74,421 were tested to determine if the cash disbursements were in accordance with HUD Handbook 4370.2. Of the forty cash disbursements, one cash disbursement of $1,022 tested did not have supporting documentation, therefore were unable to be tested for compliance with HUD Handbook 4370.2 and deemed noncompliant. By extrapolating our identified error rate on cash disbursements tested that were noncompliant (1.38%) over the total population of cash disbursements for the year ended December 31, 2022 of $935,047, $12,904 of cash disbursements could be noncompliant based on the above error rate.
Questioned Costs: $12,904
Recommendation: We recommend that management ensure supporting documentation is maintained for all disbursements from project operations.
Views of Responsible Officials and Corrective Action Plan: Management acknowledges the requested disbursement did not have supporting documentation available. Management will ensure supporting documentation is maintained for all disbursements from project operations.