Core Issue: The Agency failed to secure required depository agreements for new bank accounts, leading to noncompliance with HUD regulations.
Impacted Requirements: HUD mandates that agencies have proper agreements to protect federal funds and ensure third-party rights.
Recommended Follow-Up: The Agency should reach out to financial institutions to obtain and sign the necessary depository agreements.
Finding Text
Finding 2022-003: Deposit Collateralization Material Weakness/Noncompliance Housing Choice Voucher Program ? 14.871 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: The Agency opened up new bank accounts during the year and did not obtain the required depository agreement. Cause: The Agency was unaware of the requirement. Effect or Potential Effect: The Agency was in noncompliance with HUD?s requirement to have proper depository agreements. Recommendation: The Agency should contact its financial institutions and provide them with the appropriate depository agreement to be signed. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.
Corrective Action Plan
Section III: Finding 2022 ? 003 Deposit Collateralization Agree with finding. The Authority will contact its financial institution and other area financial institutions to meet the proper depository requirements and have depository agreement signed by financial institution.