Finding 369455 (2023-001)

Finding 2023-001 Allowability of Costs –Ineligible Costs Assistance Listing Number 14.850, Noncompliance - Low Rent Public Housing Criteria- Title 2, Part 200, Uniform Administrative Requirements, states that the entity should "establish and maintain effective internal control over the Federal award and provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes." This requirement also specifies that type of payments allowed and the controls over those payments. Condition- During audit fieldwork, we identified credit card purchases that were for the personal benefit of all employees. The Housing Commission purchased gift cards totaling $1,030 for all employees and gifted to employees as a year-end bonus. The Housing Commission has internal controls in place which require signatures of approval by the Executive Director and a Board Commissioner for all purchases. The purchase was approved by both required parties. Questioned Cost- $1,030 Effect- Non-compliance with the federal allowability requirement. Inability to effectively approve transactions. Cause- Failure to execute controls over the federal allowability compliance requirement Recommendation- We recommend the Commission implement strengthened controls over the approval of credit cards purchases.