Finding Text
Criteria
Replacement reserve disbursements should be made for only HUD approved purposes
according to HUD guidelines.
Condition
During our audit procedures we noted that a disbursement was made for the same expense
twice.
Cause of Condition
The control in place over replacement reserve disbursements did not detect the error due to
two separate employees requesting disbursement on same invoice independently. Effect
Due to the weakness in internal controls and compliance finding noted above, there is a risk
of federal funds being expended on activities that are not allowed.
Questioned Costs: $4,230
Identification as a Repeat Finding, if applicable – No
Recommendation
We recommend that management review their current policies and procedures and establish
adequate internal controls related to replacement reserve disbursements. In addition, we
recommend the Project return the funds to the replacement reserve account.
Management’s Response
Please see Project’s Corrective Action Plan included in this reporting package.