Finding Text
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Cash Management
Material Weakness in Internal Control over Compliance
Criteria – The Authority is to maintain supporting documentation for the reimbursement of costs incurred prior to the drawdown of program funds.
Condition – During out testing, we identified differences in the amounts drawn down for the Capital Fund program and the amounts recorded in the general ledger, resulting in material proposed audit adjustments. In addition, there was no review by another individual prior to the drawdown of funds.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Effect – Insufficient documentation was maintained and there was no review in place, which resulted in funds being inaccurately recorded in the accounting system.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain supporting documentation for the amounts drawn down and ensure the amounts are properly recorded. In addition, we recommend that another individual perform a review prior to the funds being drawn down.
Views of Responsible Officials – Management agrees with the finding.