Finding 1125069 (2024-001)

2024-001 – U.S. Department of Housing and Urban Development – Section 8 Project-Based Cluster, Assistance Listing No. 14.195 Condition: Supporting documentation for three disbursements selected for testing could not be located. Criteria: Compliance requirements surrounding allowable costs require the selection of a sample of disbursements made during the year under audit. Cause: Policies and procedures are in place for document retention, however, a system conversion over the accounts payable cycle resulted in these three invoices being misplaced. Effect: Costs incurred with the use of project funds could not be verified for these three disbursements. Context: A sample of 40 disbursements was selected at random from a population of all disbursements during the year. The test found that 3 of the 40 disbursements did not contain supporting documentation, such as an invoice, to support the expense. Recommendation: The Organization should implement further procedures surrounding the accounts payable function to ensure all supporting documentation is retained for all expenditures. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation and has implemented a new software platform surrounding the accounts payable function to ensure future compliance.