Finding 1075804 (2023-001)

2023-001 Special Tests 14.128 Mortgage Insurance Hospitals U.S. Department of Housing and Urban Development Significant Deficiency Criteria: The Uniform Guidance requires appropriate internal controls over compliance for each direct and material compliance requirement. Proper controls should be established to ensure written consent from HUD prior to incurring new debt or lease arrangements is obtained. Condition: The System did not have a control process established to ensure written consent was obtained. Effect: The System did not maintain written consent from HUD prior to obtaining new lease arrangements. Cause: Lack of effectively designed and implemented controls around obtaining written consent from HUD regarding new debt or lease arrangements. Questioned Costs: None. Context: The new lease arrangements were tested and there were no approvals from HUD provided during that testing. Identification of Prior Year Finding: 2022-002 Recommendation: Management should establish effective controls over compliance to ensure the written consent is obtained prior to incurring new debt or lease arrangements. Management Response: See corrective action plan.