Finding Text
The person who was the initial Executive Director for the audit year was hired in June 2018. She passed away on May 21, 2023. A person was hired as Interim Director effective June 1, 2023, and served as Interim through June 30, 2024. A new E.D. was hired, who began on July 1, 2024.
Low Rent Program-CDFA # 14.850, Section Eight Housing Choice Voucher Program-CDFA# 14.871 and Capital Fund-#14.872-Allowable Costs
Finding 2023-001-Internal Controls Inadequate for Disbursements-Allowable Costs
Criteria and Condition
Good internal controls should be in place to make sure that disbursements are for eligible payments, are correctly classified, and are timely paid. Good controls ensure that there is proper, documented review of all these functions. Records should be maintained in an order that is conducive to efficient and timely summarizing by the outside fee accounting firm. Unaudited financial statements should be produced on a timely basis, and reviewed by the Board of Commissioners.
Context
In our original sample of sixty disbursements, seven of the sixty were not supported by invoices or other adequate documentation. In our expanded tests of disbursements, a total of $29,986 of disbursements were not supported by adequate documentation. These unsupported disbursements included checks and electronic payments. Unsupported payments were noted to vendors, and credit cards. Without the proper documentation, it is impossible to be certain that these were business related expenses.
In addition, there was a lack of documented, supervisory review of the invoices or statements by a second party before the disbursements were paid. A second review was not noted for electronic payments.
Accounting information was not sent to the fee accountant for the audit year on a timely basis. The fee accountant was not able to submit the unaudited financial statements until June 19, 2024.
The defined contribution plan is underpaid by a total of approximately $12,634 for the years ending September 30, 2022, 2020, and 2019 (2021 was correct). In addition, $1,600 was contributed for the current year for an ineligible employee. Other disbursements issues noted include the following:
(a)-Duplicate payments were made to vendors. Interim management that began June 2023 reduced the amount of noted exceptions.
(b)-Late fees were assessed by vendors
(c)-General Fund check vouchers were numerically out of order for most of the year, which made processing much more difficult for the fee accountant and later the auditor
Effect
Some expenditures were not timely made, or supported, and may have been ineligible. The defined contribution plan is underfunded by approximately $12,634. $1,600 was paid for an ineligible employee. Accounting information was not timely submitted to the fee accountant, and when it finally was, it was not in good shape. Unaudited financial statements were not timely produced and thus not timely reviewed by the Board of Commissioners.
Cause
These are not new issues. Similar findings have been made in the last few years.
Questioned Costs
$29,986
Recommendation
The Board of Commissioners should periodically review the corrections being made to address each of the sub-parts noted above in Context. Most efficient PHAs try to have the complete accounting information sent the fee accountant by the 15th of the following month.
View of Responsible Officials and Planned Corrective Action
I am Jedidiah Jackson. I was hired as E.D., effective July 1, 2024. We are in the process of addressing the problems noted in the audit, as well as correcting other issues noted by HUD.