Core Issue: The client failed to prepare reconciliations for FY 2024 capital fund grant revenues and costs, leading to potential misstatements.
Impacted Requirements: This deficiency violates federal regulations and reporting guidelines for the Capital Grant Program.
Recommended Follow-Up: The Housing Authority should implement monthly reconciliations to strengthen internal controls and ensure compliance.
Finding Text
Finding 2024-003 – Capital Fund Grant Reconciliations – Special Tests – Significant Deficiency Capital Fund Program – ALN #14.872
Criteria:
The Code of Federal regulations and the Capital Grant reporting requirements give the guidelines for accounting and reporting of the Capital Grant Program activity.
Condition & Cause:
The client did not have prepared reconciliations of the FY 2024 capital fund grant revenues and associated costs. We have had to reconstruct this based on our examination of the data within the accounting system. We were able to get the variances to a point that we believe are immaterial to the financial statements.
Effect:
Inadequate internal controls in this area can result in the possibility of misstatements in the financials and could result in noncompliance with grant management. Additionally, improper record keeping can cause a deficiency in cash management and requesting funds from the eLoccs system.
Recommendation:
We recommend that the Housing Authority should reconcile this monthly.
Questioned Costs: None
Repeat Finding: No
Was sampling statistically valid? Yes
Categories
Cash ManagementReportingSignificant DeficiencyInternal Control / Segregation of DutiesSpecial Tests & Provisions