Finding Text
Allowable Costs, Payroll Disbursements - AB Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 2 CFR 200.430, compensation charged to federal awards must be reasonable, adequately documented, and supported by records that accurately reflect the work performed. Payroll costs charged to the Housing Voucher Cluster must be properly allocated based on actual services provided and supported by appropriate documentation. Condition: The Commission did not have adequate procedures in place to ensure time records were reconciled to payroll registers and that payroll costs charged to the Housing Choice Voucher Program were supported by documentation accurately reflecting actual payroll activity. Questioned costs: $1,545.25, see calculation determination under context. Context: During testing of 40 payroll files, exceptions were noted in the following: - For 1 sample, gross wages recalculated based on approved timesheet hours and authorized pay rates totaled $3,830.05, while gross wages recorded on the payroll register totaled $4,836.10, resulting in an unsupported variance of $1,006.05. - As a result of our testing, 2 more individuals were identified who had been paid incorrectly. Cause: The Commission did not have adequate procedures in place to ensure time records were reconciled to payroll registers and that payroll costs charged to the Housing Choice Voucher Program were supported by documentation accurately reflecting actual payroll activity. Effect: The Commission is not in compliance with HUD requirements. Repeat finding: No. Recommendation: We recommend the Commission implement procedures to ensure payroll costs charged to the Housing Voucher Cluster are properly supported, accurately allocated, and reconciled to payroll records. Management should review and approve payroll allocations and investigate any variances to ensure compliance with 2 CFR 200.430. Views of responsible officials: There is no disagreement with the audit finding.