Finding Text
Finding 2025-002 Material Weakness in internal control over compliance U.S. Department of Housing and Urban Development - Healthy Homes Production Program ALN 14.913 Grant period 1/1/25-12/31/25 A/B - Activities Allowed/Allowable Costs Criteria: The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition: During our testing of disbursements, we noted one pay period of the three sampled did not have documentation of approval. Cause: Policies and procedures were not appropriately adhered to in certain instances to ensure that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect: Without a documented review control, there is an increased risk that errors in the costs charged to a major program may not be detected and corrected timely. Questioned Costs: None Context/ Sampling: The Organization charged payroll to the Healthy Homes Production program 33 times during 2025. For the 3 items tested, supporting documentation was present; however, 1 of the pay periods tested lacked documentation of review and approval prior to submission. Our testing did not identify material allowed activities/allowable cost errors or known noncompliance. However, the absence of documented review represents a deficiency in internal control over compliance for the Activities Allowed/Allowable Costs compliance requirement. Repeat Finding: No Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. View of Responsible Officials: Management agrees with the finding and will ensure adherence with policies and procedures in future transactions.