Finding Text
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: Yes, 2023-003
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial
institutions in the form required by the U.S. Department of Housing and Urban Development
(HUD). The agreements serve as safeguards for Federal funds and provide third party rights to
HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing
account (24 CFR section 982.156).
Condition and Context:
The City did not enter into a depository agreement with their financial institution until April 17,
2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository
agreement requirement. This non-compliance was brought to the attention of management during
their 2024 fiscal year and was corrected soon after.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement
expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City implements a system to track the expiration of the agreement to avoid
lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.