Finding 1121117 (2024-002)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 & 14.879 Federal Award Identification Number MD032VO - 2024 Federal Award Year 2024 Pass-Through Agency: N/A Pass-Through Number: N/A Compliance Requirement: Special Tests and Provisions Award Period: 7/1/2023 - 6/30/2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance Requirements: Public Housing Agencies (PHAs) must enter into General Depository Agreements (GDA) with their financial institutions, as specified by HUD. These agreements protect federal funds and grant third-party rights to HUD. Many agreements include terms requiring the funds to be placed in interest-bearing accounts (24 CFR section 982.156). Condition: The County has not established a depository agreement with their financial institution, as mandated by 24 CFR 982.156. Context: During our review of the County's financial management practices and processes, we found that the County lacks a depository agreement with their financial institution, as required by 24 CFR 982.156. Questioned costs: None. Cause: The County was unaware that the General Depository Agreement requirement was applicable to them. Effect: HUD has not been granted the necessary third-party rights to recover federal funds if needed. Repeat Finding: No. Recommendation: We recommend the County establish procedures to ensure compliance with HUD requirements, including entering into a general depository agreement in the form required by HUD. Views of Responsible Officials and Planned Corrective Action: The County agrees with this finding.