Finding Text
2020-004 Segregation of Duties (Significant Deficiency; Other Noncompliance)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: HOME Investment Partnerships Program
Assistance Listing Number: 14.239
Condition: During our testing of new loans charged to the HOME Investment Partnerships Program, we tested a sample of 4 loans out of the population of 22 new loans granted during 2020. For one
loan out of our sample we identified that the same two people who approved the loan also signed the distribution check.
Criteria: In accordance with Uniform Guidance Part 200.303, DBAS must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Context: Using the complete population of 22 new loans in 2020 charged to the HOME Investment Partnerships Program, we tested a sample of 4 loans.
Effect: Proper segregation of duties was not followed presenting elevated risks of unauthorized or inaccurate issuance of loan proceeds.
Questioned costs: None
Cause: Management did not have adequate internal controls in place for proper segregation of duties.