Finding 497991 (2023-001)

2023 – 001: Depository Agreement Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Award Period: January 1, 2023 to December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or specific requirement: HUD regulations at 24 CFR S982.52 Section 8 Tenant Based Assistance states, “the PHA must comply with the consolidated ACC, HUD regulations and other requirements for the program, issued by HUD headquarters, as regulations, Federal Register notices or other binding program directives as will as PHAs HUD-approved applications for program funding.” 24 CFR S 982.156(c) states, “the PHA must enter into an agreement with the depository in the form required by HUD.” Additionally, Section 13, Paragraph b of form HUD-5250, the “Consolidated Annual Contributions Contract” (ACC) requires PHAs to enter into an agreement with the depository institution, on the form required by HUD. Condition: The Authority has not executed a General Depository Agreement for accounts holding EHV Service Fee funds in accordance with HUD requirements. Questioned costs: None Context: We reviewed the General Depository Agreement (GDA) and HUD report No. QAD-EHV-2023- WI186 noting the Authority had a GDA in place with its financial institution, but was not updated for the inclusion of the EHV related bank accounts. Cause: The Authority currently maintains two (2) accounts with Nicolet Bank which hold EHV service fee funds, a municipal checking account and a pooled funds sweep account. These accounts are not currently covered by a GDA. Effect: A lack of a properly executed GDA negatives affects HUDs ability to exert control over EHV funds held by the Authority, if HUD should need to freeze those funds because of default on part of the Authority. Repeat Finding: No Recommendation: We recommend that the Authority implement a process for ensuring that the GDA is updated with the financial institution when bank accounts are created or closed. Views of responsible officials: There is no disagreement with this finding.