Finding 41780 (2022-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-04-30
Audit: 39484
Organization: Grambling Housing Authority (LA)
Auditor: Mike Estes PC

AI Summary

  • Core Issue: The surety bond required for fraud protection was cancelled years ago, leaving the Authority exposed to potential financial losses.
  • Impacted Requirements: Federal regulations mandate that a fidelity bond must always be in effect to safeguard against employee fraud.
  • Recommended Follow-Up: Ensure the blanket bond policy remains active and review coverage annually, with a suggested minimum of $30,000.

Finding Text

The current Executive Director did not begin her employ until May 25, 2022. Housing Choice Voucher-CDFA#14.871, Low Rent-CDFA#14.850 and Capital Fund-CDFA#14.872 2022-001-Fidelity-Surety Bond Is Not In effect-Special Tests Criteria or Specific Requirement Federal regulations require that a fidelity, also called a surety bond, is always in effect. This covers the Authority in the event of a monetary loss due to fraud committed by a common law employee. The bond can be a position bond, which names each employee. Preferably the bond should be a blanket, which covers all employees without naming them. Condition Found It appears that the bond was cancelled a few years ago due to non-payment. Cause Unknown. Effect The risk of fraud loss is not minimized by insurance, as good business practices and HUD regulations require. Recommendation The Authority should obtain a blanket bond policy. The amount of dollar coverage is subjective. However, we recommend a minimum of $30,000 per year. Origination Date The finding originated in the year ended September 30, 2020. View of Responsible Official We obtained, effective November 18, 2022, a blanket surety bond with coverage of $30,000.

Corrective Action Plan

GRAMBLING HOUSING AUTHORITY 300 B.T. Woodard Circle Grambling, LA 71245 Phone No. (318) 247-6035 Fax No. (318) 247-6554 HOUSING AUTHORITY OF GRAMBLING, LOUISIANA CORRECTIVE ACTION PLAN YEAR ENDED SEPTEMBER 30, 2022 Corrective Action Plan Finding: 2022-001-Fidelity-Surety Bond Is Not In effect-Special Tests Condition: It appears that the bond was cancelled a few years ago due to non-payment. Corrective Action Planned I am Sharon Dixson, Executive Director and Designated Person to answer these findings. We will comply with the auditor?s recommendation. Person responsible for corrective action: Sharon Dixson, Executive Director Telephone: (318) 247-6035 Housing Authority of Grambling, Louisiana Fax: (318) 247-6554 300 B.T. Woodard Circle Grambling, LA 71245 Anticipated Completion Date- Already completed

Categories

HUD Housing Programs Special Tests & Provisions

Other Findings in this Audit

  • 41781 2022-003
    Material Weakness Repeat
  • 41782 2022-004
    Material Weakness Repeat
  • 41783 2022-005
    Material Weakness Repeat
  • 41784 2022-001
    Material Weakness Repeat
  • 41785 2022-002
    Material Weakness Repeat
  • 41786 2022-003
    Material Weakness Repeat
  • 41787 2022-005
    Material Weakness Repeat
  • 43062 2022-001
    Material Weakness Repeat
  • 43063 2022-004
    Material Weakness Repeat
  • 43064 2022-005
    Material Weakness Repeat
  • 43065 2022-001
    Material Weakness Repeat
  • 43066 2022-004
    Material Weakness Repeat
  • 43067 2022-005
    Material Weakness Repeat
  • 618222 2022-001
    Material Weakness Repeat
  • 618223 2022-003
    Material Weakness Repeat
  • 618224 2022-004
    Material Weakness Repeat
  • 618225 2022-005
    Material Weakness Repeat
  • 618226 2022-001
    Material Weakness Repeat
  • 618227 2022-002
    Material Weakness Repeat
  • 618228 2022-003
    Material Weakness Repeat
  • 618229 2022-005
    Material Weakness Repeat
  • 619504 2022-001
    Material Weakness Repeat
  • 619505 2022-004
    Material Weakness Repeat
  • 619506 2022-005
    Material Weakness Repeat
  • 619507 2022-001
    Material Weakness Repeat
  • 619508 2022-004
    Material Weakness Repeat
  • 619509 2022-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $371,841
14.871 Section 8 Housing Choice Vouchers $318,617
14.850 Public and Indian Housing $309,400
14.871 Covid-19-Section 8 Housing Choice Vouchers $2,898