Finding Text
Criteria or specific requirement: The Company must obtain a fidelity bond that is equal to or exceeds two months gross potential collections.
Condition: Actual fidelity bond coverage amount in FY2024 was less than 2 months of calculated gross potential collections.
Questioned costs: $0
Context: No sampling, entire population tested.
Cause: The Company did not update coverage amount to keep pace with revenue growth.
Effect: Result of the finding is that actual fidelity bond coverage amount fell below the required minimum.
Repeat finding: No
Recommendation: The auditor recommends that management increase their coverage amount to come into compliance with HUD requirements, as well as develop policies and procedures to monitor required coverage minimums.
Views of responsible officials: There is no disagreement with the audit finding.