Finding Text
Finding SA2021-002: Lack of Supporting Documentation for Expenditures AL number: 14.850 AL Title: Public and Indian Housing Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification number and year: CA010 (2021) Criteria: 2 CFR part 200, subpart E, costs charged to federal funds must be allowable, reasonable, and properly documented. Costs should be adequately supported to demonstrate they were necessary and directly related to the deferral programs. Condition: During our audit, we tested a sample of 60 transactions. Of these, 14 transactions with amount $151,619 lacked sufficient supporting documentation to verify the nature and allowability of the expenditures. Cause: We understand that the staff overseeing the federal awards during fiscal year 2021 are no longer with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year were unable to provide supporting and documentation was not properly maintained, resulting in missing records to support certain expenditures. Effect: The Housing Authority may have charged unallowable costs to the Operating Fund, resulting in noncompliance with federal requirements. Questioned Costs: We question the costs in the amount of $151,619 noted above. Recommendation: The Housing Authority should develop and implement procedures to ensure that all required documentation related to public housing expenditures is properly maintained and supported. Staff responsible for approving and managing these records should be trained to ensure they understand and comply with applicable program requirements. Management Response: The Authority acknowledges this finding. Staff have implemented procedures requiring that all invoices, contracts, purchase orders, and supporting records be scanned and attached in MUNIS at the time of processing. A new review workflow ensures supervisory approval before expenditures are charged to federal funds. The Authority is conducting retroactive file recovery where possible and implementing staff training on documentation requirements under 2 CFR Part 200. These improvements will ensure expenditures are fully supported, allowable, and readily accessible for audit.