Finding Text
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.