Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $53,240 Context: During testing of a sample of 25 disbursements, it was noted that 7 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 1 instance where the documentation provided was not approved prior to disbursement ? 1 instance where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.