Finding 1145816 (2024-003)

Condition: Out of the 72 grant drawdowns during the year, 24 drawdowns were tested and it was noted that 1 of the drawdowns was made in advance of the supporting invoices being paid to the vendors and subsequently the invoices were not paid within the 72-hours, as required. Context: The auditor haphazardly selected 24 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Agency is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Authority to be properly spent within 72 hours of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Agency experienced staff turnover in the finance department as well as difficulty replacing personnel knowledgeable with HUD and grant reporting requirements. Effect: The Agency did not disburse the capital funds in a timely manner for one of the draws made during the year. Questioned Costs: $40,500 Auditor’s Recommendations: The Agency should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan