Core Issue: Significant deficiencies in cash disbursement processes, including missing receipts, approvals, and contracts.
Impacted Requirements: Non-compliance with HUD regulations and internal control standards for cash disbursements.
Recommended Follow-Up: Review and enhance documentation processes and internal controls to ensure compliance before future disbursements.
Finding Text
2022-002 Condition: Deficiencies Noted in Cash Disbursements
During the review of forty (40) Cash Disbursement items selected for audit, the following deficiencies were noted:
4 Checks selected for audit were not fully supported with receipts and invoices to support the disbursement
15 Checks selected lacked appropriate approval for disbursement
2 Checks selected lacked correct allocation for the disbursement
15 Disbursements lacked signed contracts or procurement documentation
1 Payroll check lacked agreement to budget.
Assistance Listing #: 14.867
Questioned Costs: Undetermined
Cause: The Authority’s deficiency in the area of cash disbursements is a lack of internal controls or the invoice approval process.
Effect: The Authority has not been in complete compliance with HUD regulations and internal control requirements to support invoices.
Criteria: 24 CFR requirements for Cash Disbursements Documentation
Recommendation: We recommend a review of the cash disbursement documentation process in order to ensure that each disbursement is fully documented prior to check issuance, and we further recommend an update of internal control policies and regular quality control reviews over cash disbursements to ensure compliance with HUD regulations.
Reply: Management agrees with the audit finding and the auditor’s recommendation. We will implement procedures and changes to ensure that this finding will be cleared by the subsequent fiscal year audit.
Categories
Procurement, Suspension & DebarmentAllowable Costs / Cost PrinciplesHUD Housing ProgramsInternal Control / Segregation of Duties