Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Voucher Cluster
Assistance Listing Numbers: 14.871/14.879
Federal Award Identification Number and Year: SC911VO - 2023
Award Period: July 1, 2022 – June 30, 2023
Compliance Requirement: Special Tests and Provisions – Depository Agreement
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Authorities are required to enter into depository agreements with their financial institutions in the form required by the U.S. Department of Housing and Urban Development (HUD). The agreements serve as safeguards for federal funds and provide third party rights to HUD. Among the terms in many agreements are requirements for funds to be placed in an interest-bearing account (24 CFR section 982.156).
Condition: The Authority does not have a depository agreement in place with HUD. Housing Voucher Cluster funds are not deposited in a separate interest-bearing account.
Questioned costs: Unable to determine.
Context: A depository agreement has not been executed.
Cause: The Authority’s Housing Voucher Cluster funds are not deposited in a separate interest-bearing account.
Effect: The Authority is not in compliance with depository agreement requirements.
Repeat Finding: Yes, see finding 2022-003.
Recommendation: We recommend that the Authority sets up a separate interest-bearing account and executes a depository agreement with their financial institution and HUD; alternatively, we recommend that the Authority obtains a waiver from this requirement if local regulation prohibits the Authority from following 24 CFR section 982.156.
Views of responsible officials: There is no disagreement with the audit finding.