Finding Text
2024 – 010 – Allowable Cost - HCVP Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Award Identification Number and Year: FL007, 2024 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR part 200, subpart E (Cost Principles), PHAs must ensure that all program expenditures charged to the Housing Choice Voucher (HCV) Program are allowable, reasonable, necessary, and properly supported. Specifically, 2 CFR sections 200.302 and 200.303 require the PHA to maintain effective financial management systems and internal controls to ensure that costs are accurately recorded, supported by documentation, and compliant with federal requirements. Payroll costs must be supported by appropriate time and effort documentation in accordance with 2 CFR section 200.430, and all cash disbursements must be supported by invoices, approvals, and evidence that the expenditures benefit the HCV Program. The PHA must ensure that all payroll charges, vendor payments, and other cash disbursements allocated to the HCV Program are supported by adequate documentation, properly approved, and consistent with the PHA’s cost allocation plan, financial policies, and federal cost principles. All expenditures must be recorded accurately and retained in accordance with 24 CFR section 982.158(a), which requires PHAs to maintain complete and accurate accounts and records for all program transactions. Condition: During the testing of the Housing Voucher Cluster we noted the following errors Cash Disbursements • Of the 40 invoices that we reviewed, we noted a total of 40 invoices did not have a documented approval Payroll Disbursement Testing • 7 timecards were noted as not having been approved • 8 timecards could not be provided • Information for 3 employees could not be provided Questioned costs: N/A Context: Cash Disbursements Out of the 40 invoices that we reviewed, we noted a total of 40 invoices without written approval on the invoices. Payroll Disbursements Out of the 40 timecards files that we reviewed, we noted 10 timecard files that contained errors as noted. Cause: The Authority failed to follow the internal controls process that was designed to ensure that requirements were being met. 2024 – 010 – Allowable Cost - HCVP Effect: The Authority does not have proper controls over the payroll and cash disbursement approval process. Repeat Finding: No Recommendation: We recommend that the Authority designate an individual to review both cash disbursements and payroll disbursements for all program expenditures. Views of responsible officials: There is no disagreement with the audit finding.