Finding 3041 (2022-002)

Material Weakness Repeat Finding
Requirement
AN
Questioned Costs
$1
Year
2022
Accepted
2023-12-01

AI Summary

  • Core Issue: 17 out of 40 disbursements lacked necessary documentation, totaling questioned costs of $7,287.80.
  • Impacted Requirements: The organization is not meeting compliance standards set by HUD and Uniform Guidance due to inadequate record retention and oversight.
  • Recommended Follow-Up: Ensure all expenditures have supporting documentation, involve the Board of Directors in approvals, and discontinue the use of petty cash and debit/credit cards.

Finding Text

Compliance Requirement: Activities Allowed or Unallowed and Special Tests and Provisions Criteria: The organizations’ disbursements must be supported by approved bills, invoices, or other supporting documentation. Funds should also be reasonable and necessary for the operation and maintenance of the project. Condition and Context: During our audit procedures, it was noted that management was unable to provide sufficient documentation of certain expenses. Specifically, 17 of 40 disbursements did not have any supporting documentation to support their purpose, approval, or appropriateness. Questioned Costs: $7,287.80 Cause: The organization does not policies in place for record retention, and there is no evidence of oversight from the Board of Directors. Effect: The organization is not in full compliance with the requirements with its regulatory agreement with HUD or the Uniform Guidance. Recommendation: We recommend that all supporting documentation for all expenditures be retained by the organization and that the organization involve the Board of Directors to approve disbursements for the organization. We also recommend that the organization stop using petty cash, and not use debit or credit cards in the future. Management Response: See Corrective Action Plan.

Corrective Action Plan

Finding 2022-002 - Compialnce Requirement: Acitivities allowed or unallowed and Special Tests and Provisions Management's view: Management acknowledges findings and understands this was an internal facing situation. Management acknowledges responsibility of properly and accurately maintaining support for disbursements to show proper control is in place. Proposed Corrective Action: - Management has begun to keep individual folders for all vendors maintain records - Proper record keeping to ensure all items purchased are proper business expenses Anticipated Correction Date: Correction has been implemented. Managements has files for all disbursements. No petty cash is used for purchases.

Categories

Questioned Costs Special Tests & Provisions HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 3042 2022-003
    Material Weakness Repeat
  • 3043 2022-004
    Material Weakness Repeat
  • 3044 2022-005
    Material Weakness Repeat
  • 3045 2022-006
    Material Weakness Repeat
  • 3046 2022-007
    Material Weakness
  • 579483 2022-002
    Material Weakness Repeat
  • 579484 2022-003
    Material Weakness Repeat
  • 579485 2022-004
    Material Weakness Repeat
  • 579486 2022-005
    Material Weakness Repeat
  • 579487 2022-006
    Material Weakness Repeat
  • 579488 2022-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $81,072