Finding Text
Finding 2025-004: Activities Allowed/Allowable Costs/Cost Principles Public Housing Program, Assistance Listing #14.850 Section 8 Housing Choice Voucher Cluster Program, Assistance Listing #14.871 Material Weakness - Repeat Finding Criteria: A properly designed internal control structure relies greatly on a proper segregation of duties between several individuals. The duties related to initiating, authorizing, recording, processing and reporting financial data would be segregated so there is less likelihood that a misstatement of the entity’s financial statements would occur. In addition, the controls over the significant areas should be documented in order to determine that the controls are functioning. Condition: The Agency consists of limited administrative employees and as a result does not have personnel assigned responsibilities in such a way that different employees handle different parts of the same transaction. The limited number of employees results in an inadequate overall internal control structure design. Cause: The Agency has not properly implemented and documented the internal controls as designed. Effect or Potential Effect: The lack of controls over the categories above could result in questioned costs and misstatements in the financial statements in the future. Recommendation: The Agency needs to review and re-evaluate its internal control procedures over the significant areas of its internal control structure and make sure the controls are well documented to ensure the controls are identifiable and traceable during the audit process. Further, we noted in March 2026 that the Agency adopted a new internal control policy but needs to implement the policy. View of Responsible Official: Management agrees with the Finding.