Finding Text
Finding 2017-006 - Material Weakness - Maintenance of Financial Records -- Federal Awarding Agency: Department of Housing and Urban Development -- CFDA Number and Title: CDBG Entitlement Grants Cluster; 14.218 Community Development Block Grants/Entitlement Grants -- Applicable Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles -- CFDA Number and Title: 14.267 Continuum of Care Program -- Applicable Compliance Requirements: -- Activities Allowed or Unallowed; Allowable Costs/Cost Principles and Eligibility. -- Criteria: Title 24 of the United States Department of Housing Urban Development (“HUD”) of the Code of Federal Regulations (“CFR”) §570.506(a) specifies that the grantee must keep records which provide a full description of each activity that is selected for assistance, including its location, the amount of funds budgeted, obligated and expended for the activity, and the provision of the regulations under which the activity is eligible. -- Condition: Our audit revealed that certain documentation supporting drawdown amounts for certain expenditures were misplaced. -- Cause: Constant turnover in personnel responsible for administering these programs and lack of adequate training and cross training of personnel. -- Effect or Potential Effect: The funding agency could disallow the costs that do not have the appropriate supporting documentation and approvals. -- Known Questioned Costs: $173,143 -- Recommendation: We recommend that the Agency maintain the supporting documentation for expenditures as required by the federal guidelines. Further, documentation should be reviewed and approved prior to payment. -- Management’s Responses: See corrective action plan.