Finding Text
Criteria
22 CFR § 5.801 Uniform financial reporting standards, (b) (1)
Entities (or individuals) to which this subpart is applicable must provide to HUD
such financial information as required by HUD. Such information must be
provided on a n annual basis, except as required more accordance with Generally
Accepted Accounting Principles as further defined by HUD in supplementary
guidance; (2) Submitted electronically to HUD through the internet, or in such
other electronic format designated by HUD, or in such non-electronic format as
HUD may allow if the burden or cost of electronic reporting is determined by
HUD to the excessive; and (3) Submitted in such form and substance as
prescribed by HUD. Also, on Section (c) (1) the financial information to be
submitted to HUD in accordance with paragraph (b) of this section, must be
submitted to HUD annually, no later than 60 days after the end of the fiscal year
of the reporting period, and as otherwise provided by law. In addition, on Section
(d) (1) states that unaudited financial statements will be required 60 days after the
PHA” s fiscal year end, and audited financial statements will then be required no
later than 9 months after the PHA’s fiscal year end, in accordance with the Single
Audit Act and 2 CFR Part 200, Subpart F.
Condition
The Municipality did not submit the required Financial Reports to the US
Housing and Urban Development for the fiscal year ending June 30, 2024, during
the required period. The unaudited Financial Report was not submitted on or
before August 30, 2024, also, the audited Financial Report was not submitted on
or before March 31, 2025
Questioned Cost
None determined.
Cause
Control procedures were not established to provide on time finance information to
prepare the required financial reports of the Housing and Urban Development.
Effect
The Municipality did not comply with the submission date required for the Financial
Reports to the US Housing and Urban Development; this could affect the continuance
and new approvals of federal program funds.
Recommendation
We recommend the Municipality maintain adequate accounting records related to the
federal funds to properly prepare the financial statements accurately and in a timely
manner. In addition, the Municipality needs to implement adequate internal controls
procedures I order to assure that the supporting documentation is available on a timely
manner. Also, proper training in the accounting system should be obtained by the
personnel in charge of preparing the Federal Financial Reports required by HUD.
Management Response
The Finance Director of the municipality has issued clear and specific instructions to
the director of this area, demanding that she and her team take immediate measures to
ensure that these types of findings are not repeated in future fiscal periods or in the
years to come.