Finding Text
2025-005 ALN 14.850 – Public Housing Operating Fund – Special Tests and Provisions – Insufficient Deposit Collateral Criteria and Condition: The Authority did not fully collateralize uninsured bank balances as of March 31, 2025. Amount of Questioned Costs: None. Context: During our Firm’s deposit collateral testing, it was noted that the Authority's deposits with Stock Yards Bank and Central Bank and Trust were not sufficiently collateralized. The Authority, therefore, has a high level of custodial credit risk due to the Authority's lack of controls in place to properly monitor the security of their deposits. Cause: Effect or Potential Effect: The Authority did not have proper monitoring controls in place to ensure all funds over $250,000 were collateralized. The Authority's bank balances that were uninsured and uncollateralized in the amount of $1,018,237 existed as of March 31, 2025. Auditor’s Recommendation: Procedures should be implemented requiring the proper level of management to check all bank balances monthly to ensure compliance with cash management policies and HUD collateralization policies. Grantee Response: Management acknowledges the finding and will follow the auditor’s recommendation.