Finding 41459 (2022-001)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-06-29
Audit: 37694
Auditor: Wipfli LLP

AI Summary

  • Core Issue: The Authority overpaid utility bills by submitting the same costs twice, resulting in questioned costs of $691.
  • Impacted Requirements: Compliance with federal cost principles was not met due to control deficiencies in disbursement processes.
  • Recommended Follow-Up: Implement training and supervision for staff handling cash disbursements to ensure compliance with federal grant guidelines.

Finding Text

2022-001 Allowable Costs/Cost Principles Federal program information: Funding agency: U.S. Department of Treasury Title: Emergency Rental Assistance Program Assistance Listing number: 21.023 Award year: 2022 Criteria or Specific Requirement: Uniform guidance requires that grant expenses be allowable and comply with cost principle guidelines. Condition: Pursuant to our testing of disbursements and internal controls over disbursements, Wipfli LLP noted the following control deficiency and noncompliance: Eight of the 42 cash disbursements selected for testing were incorrect. These all related to utility payments, where the current portion due was paid out twice. The Authority submitted the same cost twice for reimbursement totaling $691 of the invoices tested. From our sample of 42 disbursements, we examined 8 utility payments consisting of $7,689. Total utility payments for the grant were $283,105. The sample was not a statistically valid sample. Context: We tested a sample of 42 non-payroll disbursements. Questioned Costs: $691. Effect: The program overpaid utility bills to participants and overstated grant expenditures. Cause: Program staff turnover and lack of supervisory monitoring contributed to internal control deficiencies and grant noncompliance. Repeat: Yes. Auditor?s Recommendation: We recommend the Authority provide proper training and supervision over employees responsible for cash disbursements to ensure federal grant expenditures are allowable. Views of Responsible Officials: We agree with the auditor's recommendation and have prepared a corrective action plan to correct this.

Corrective Action Plan

2022-001 Allowable Costs/Cost Principles Federal program information: Funding agency: U.S. Department of Treasury Title: Emergency Rental Assistance Program Assistance Listing number: 21.023 Award year: 2022 Condition: Pursuant to our testing of disbursements and internal controls over disbursements, Wipfli LLP noted the following control deficiency and noncompliance: Eight of the 42 cash disbursements selected for testing were incorrect. These all related to utility payments, where the current portion due was paid out twice. The Authority submitted the same cost twice for reimbursement totaling $691 of the invoices tested. From our sample of 42 disbursements, we examined 8 utility payments consisting of $7,689. Total utility payments for the grant were $283,105. The sample was not a statistically valid sample. Recommendation: Wipfli recommends the Authority provide proper training and supervision over employees responsible for cash disbursements to ensure federal grant expenditures are allowable. Corrective Action Plan: CHA is in the process of restructuring our Finance department. In this process we will be updating our finance policies to stress/identify our areas of material weakness so they align and address our current audit findings and to eliminate any future findings. We will be transferring job titles and duties with current in-house personnel that clearly states job functions and responsibilities that best fits each staff persons unique skill set and aptitude. Once restructuring of our Finance department is completed (30-60 days) moving forward this will address our areas of material weakness. Name of Contact Person Responsible for Corrective Action Plan: Mary Peterson To be completed by: August 1, 2023

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties Subrecipient Monitoring Cash Management

Other Findings in this Audit

  • 41457 2022-002
    Significant Deficiency Repeat
  • 41458 2022-002
    Significant Deficiency Repeat
  • 41460 2022-002
    Significant Deficiency Repeat
  • 617899 2022-002
    Significant Deficiency Repeat
  • 617900 2022-002
    Significant Deficiency Repeat
  • 617901 2022-001
    Significant Deficiency Repeat
  • 617902 2022-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.867 Indian Housing Block Grants $1.84M
21.023 Covid-19-Emergency Rental Assistance Program $977,982
10.427 Rural Rental Assistance Payments $273,470
21.026 Covid-19-Homeowner Assistance Fund $173,492
14.867 Covid-19-Indian Housing Block Grants $157,894
10.415 Rural Rental Housing Loans $124,589