Finding 1161492 (2021-001)

Low Rent Program-CDFA#14.850 and Housing Choice Voucher-CDFA#14.871 2021-001-Inadequate Internal Controls Over Disbursements and Payables-Allowable Costs Criteria or specific requirement Internal controls over disbursements should be adequately supported by supporting invoices or other adequate information, and cancelled checks. Payments owed to retirement plans, the IRS, and vendors should be made on a timely basis. Condition Found (a)-We reviewed an initial sample of 44 disbursements for the General Fund that covers the Low Rent program. No support was available for 6 of the disbursements, that totaled $11,387. All of the payees appeared to be normal vendors used in the Authority’s regular business dealings. (b)-We reviewed an initial sample of 40 Housing Choice Vouchers. No exceptions were noted. (c)-We also reviewed 25 Section 8 payments. We noted no exceptions in our review of supporting information or cancelled checks for these disbursements. (d)-In our other tests, we reviewed 9 other disbursements which totaled $23,634 which were not supported by invoices. All of the payees appeared to be normal vendors used in the Authority’s regular business dealings. (f)-Payroll taxes, payments to the IRA Simple Plan, and payments to various vendors were not timely paid, and significant amounts were owed at year-end. Context Disbursements should always be adequately supported by invoices or other supporting information. All payments to third parties should be timely done. Cause This finding existed in the prior year. For that audit, we asked the Executive Director why the above information was not retained. We also asked why the retirement payments and payroll taxes were not time made. We did not receive an adequate explanation. That Executive Director is no longer with the Authority. Effect Internal controls were not operating effectively. Federal regulations require that disbursements be adequately supported. Federal regulations require that retirement payments and payroll taxes be timely paid. In addition, federal law as outlined by the Employee Retirement Security Act (ERISA} was not complied with. Questioned Costs None Recommendation Payments should be adequately supported by invoices. Payments should be timely made that are owed to third parties. View of Responsible Official I am Diane Adams, Executive Director of the Housing Authority of the City of Shawnee, Oklahoma and Designated Person to answer these findings. The Shawnee PHA executed a Cooperative Agreement with the Bristow Housing Authority, effective December 1, 2023. The Agreement was subsequently extended through November 30, 2025. We have worked diligently to address and correct the deficiencies that we have encountered.