Finding Text
2025-003 FEDERAL COMPLIANCE - DISBURSEMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: The City’s internal controls require that all disbursements be approved by the finance department prior to payment and that bank reconciliations be performed on all accounts. Condition: During our audit, we noted several check runs for the Section 8 program that did not include the finance department’s approval for payment. Additionally, we noted one check that cleared for an amount other than the amount included on the check register. These errors caused increased difficulty in reconciling the bank statements in a timely manner. Cause: According to the PHA director, these differences were caused by the check registers being printed by program instead of check number. Therefore, the payment amount for several tenants for a certain check were listed in a separate section. Other errors were due to misfeeds in the check printer. Effect and Questioned Costs: Reduced effectiveness of internal controls with the possibility of incorrect payments being processed. Repeat Finding: No Recommendation: We recommend that the PHA implement procedures to ensure that checks written agree to the check register prior to mailing and the finance department approve all Section 8 check runs. These procedures should include printing the check register by check number and comparing the printed checks to the register prior to mailing. If any differences are noted due to misfeeds in the check printer, the register should be updated to reflect correct information. Furthermore, an updated check register should be provided to the finance department with a memorandum documenting the changes. The City may consider investing in printing equipment that allows check numbers to be printed on the checks instead of utilizing preprinted checks. Management’s Response: Staff will conduct a manual, check-by-check review immediately after each monthly check run and before mailing to confirm that check totals align with supporting reports. In addition, the PHA will investigate and resolve the source of the discrepancy between the HAPPY Program Management Software outputs and the PHA’s internal control records to ensure consistent and accurate reporting going forward.