Finding Text
Finding No. 2023-001: Fraudulent Payroll Activities Resulting in Theft (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Capital Fund Program
Federal Assistance Listing Number: 14.872
Compliance Requirement: Allowable Costs
Criteria: The Authority should maintain appropriate controls over the payroll process to prevent
and/or detect fraud in a timely manner.
Condition: The Authority did not have adequate controls over the payroll process, resulting in
an employee authorizing excess salary disbursements in an act of fraudulent theft.
Context: Costs are considered allowable assuming they are reasonable for the performance of
the federal program and are approved by an authorized official.
Effect: The Authority allowed for employee to disburse excess salary in an act of fraudulent
theft.
Cause: The Authority did not have the appropriate controls over the payroll process to prevent
and/or detect fraud in a timely manner.
Questioned Costs: $18,931
Recommendation: The Authority should review and enhance its policies, procedures, and
internal controls to ensure that fraud is prevented and/or detected in a timely manner.
Views of Responsible Officials: The Authority agrees with the finding.