Finding 1152316 (2024-001)

Finding No. 2024-001 – Segregation of Duties See Section II – Financial Statement Findings Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 - Lower Income Housing Assistance Program Assistance Listing #: 14.327 Questioned Costs: None Type of Finding: • Material Weakness in Internal Control Over Compliance.Finding No. 2024-001 – Segregation of Duties Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, the Center, for sound economic reasons, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Cause: For sound economic reasons, the Center must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Repeat Finding: Yes, prior year finding 2023-001. Recommendation: When this condition exists, management’s and the board’s close supervision and review of accounting information is the best means of preventing or detecting errors and fraud. Views of Responsible Officials and Planned Corrective Actions: We will continue to monitor financial results and accounting information as hiring additional employees is not practical.