Finding Text
COMPLIANCE WITH LAWS AND REGULATIONS MATERIAL WEAKNESS Public and Indian Housing Finding 2022-001 Statement of Condition: During the audit it was noted the Commission held funds of $132,355 in excess of the FDIC insurance limit at one bank that were not insured and uncollateralized. Criteria: Compliance N.15 states that the Commission is required to have depository agreements signed by all financial institutions it does business with. The deposit agreement states that the financial institution will insure any of the Commission?s funds that exceed FDIC limits. Condition: The Commission was not in compliance with the ACC contract requiring funds held in excess of FDIC limits be insured. The Commission also did not have policies and procedures in place to monitor cash and investments to verify that the collateral provided by the financial institutions was adequate throughout the year. Questioned Costs: $132,355 Effect: The Commission is not in compliance with the ACC contract. Cause: Lack of internal controls over monitoring of collateralization of underinsured accounts. Recommendation: The Commission should require its financial institutions to provide documentation of collateral at a minimum on a quarterly basis. The Commission should also adopt policies and procedures to monitor its cash and investments continuously to verify that the collateral provided by the financial institutions is adequate throughout the year. Management?s Response: Management will implement a new process that will require the banks to provide proof of insurance coverage on a quarterly basis, at minimum.