Finding 46697 (2022-001)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-07-11
Audit: 49961
Organization: Venture Development 2002, INC (NY)
Auditor: Forvis LLP

AI Summary

  • Core Issue: Invoices lacked proper signoffs and backup documentation, indicating insufficient internal controls over financial awards.
  • Impacted Requirements: Compliance with 2 CFR 200.303 regarding effective internal control and documentation for allowable costs.
  • Recommended Follow-Up: Implement a process for formal invoice approvals and ensure all supporting documents are maintained before payment.

Finding Text

Information on the federal program ? 14.181 Supporting Housing for Persons with Disabilities (Section 811), U.S. Department of Housing and Urban Development (HUD). Criteria or specific requirement - Activities allowable or unallowed and Allowable Costs / Cost Principles. In accordance with 2 CFR 200.303, the entity must establish and maintain effective internal control over financial awards to evaluate and monitor compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition ? Invoices were missing signoffs or indication of review and certain samples selected for testing were missing backup (copies of the checks/payment and/or invoices). Questioned costs ? None. Context - A sample of 40 invoices were selected from the 263 expenses incurred during the year to test if there was review of the purchase requisition or invoice in accordance with Venture Development 2002's policy. 11 of the invoices had no approval documented on the purchase requisition or invoice to indicate review that the expenses were appropriate under the federal program. In addition, management was unable to provide the invoice or purchase requisition for 5 of items selected for testing. The sample was not a statistically valid sample. Effect ? Formal approval was not noted on a sample of invoices paid and backup documentation was not maintained for all items paid. Cause ? Venture Development 2002 did not have a process in place to review utilities invoices and invoices from vendors with contracted agreements and did not have controls in place to ensure other invoices were formally signed off prior to payment. The approval is a final review of all documentation prior to signing the actual check for payment. Identification as a repeat finding, if applicable: Not applicable. Recommendation ? We recommend that Venture Development 2002 establish proper internal controls in order to properly indicate approval on invoices prior to payment and maintain documentation for the items paid. Views of responsible officials and planned corrective actions ? Please see the attached corrective action plan as submitted by management. Venture Development 2002 agrees with the finding.

Corrective Action Plan

Reference number ? 2022-001 Contact person ? Celia Solomita, CFO Management agrees that protocols will be implemented to ensure that all invoices are formally approved prior to payment. This will be in place prior to December 31, 2023.

Categories

HUD Housing Programs Allowable Costs / Cost Principles Procurement, Suspension & Debarment

Other Findings in this Audit

  • 623139 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.85M