Finding Text
Finding 2025-005: HUD Depository Agreement Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2024-003 Criteria: The Authority is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: In the prior years, the Authority opened up new bank accounts and did not obtain the required depository agreement. This was reported as a finding in the prior year. The bank in question indicated it will not sign the depository agreement. During the current year, the Authority opened up two new accounts at a different bank that did sign the agreement but still had funds at the bank that would not sign the agreement so the finding remains. The Authority indicated in the Summary Schedule of Prior Audit Findings that the finding was corrected and that was not accurate. Cause: The Authority did not take appropriate action to correct the prior year finding. Effect or Potential Effect: The Authority was in noncompliance with HUD’s requirement to have proper depository agreements. Recommendation: The Authority must move its funds to a bank that will sign the HUD depository agreement. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.