Finding Text
Finding # 2024-002 – Allowable Costs
Repeat Finding: Yes – 2023-001
AL# 10.415 U.S. Department of Agriculture - Rural Development
Questioned Cost: $2,642.34
Criteria: 40 cash disbursements were tested and one was noted as applicable to another
project of the management company and one was a duplicate payment to the management
company for an invoice.
Condition: Expenses charged to project operations, whether for management agent services
or other expenses, must be reasonable, typical, necessary and show a clear benefit to the
residents of the property.
Cause: One payment was from a credit card statement with multiple invoices for various
properties and although the invoice clearly stated the allocable property this was missed
upon entry into the general ledger. The other payment was a duplicate payment of an
invoice that was not properly marked as paid upon initial payment.Effect: The project paid for expenses that were not allocable to the project.
Auditor’s Recommendation: Invoices should be scrutinized closely and applied to the
appropriate project. All invoices should be defaced upon payment to ensure no duplicate
payment occurs.
View of Responsible Officials: Management agrees with the finding and has implemented
a corrective action plan.