Finding Text
2022 ? 003 Federal Agency: Department of Housing and Urban Development Federal Program Name: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: AZ023 and 2022 Award Period: April 1, 2021 ? March 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: PHAs are required to enter into General Depository Agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form as required by HUD in the ACC. The agreements serve as safeguards for federal funds and provide third party rights to HUD (Section 9 of the ACC). In addition, CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of special provision. The Authority should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted the Authority did not have adequate internal controls designed to ensure the HUD-approved form 51999 was executed and submitted as required by HUD in the ACC. Questioned costs: None Context: During our testing, it was noted that the Authority did not complete or submit the required general depository agreement in a form approved by HUD. Cause: Lack of management oversight in following HUD guidelines for the completion and submission of the HUD-51999 for all federal grant bank accounts. Effect: The lack of internal controls over the compliance requirements resulted in the Authority?s noncompliance over specific requirement mentioned above. Recommendation: We recommend the Authority design and implement controls to ensure the required general depository agreements are executed and submitted to HUD utilizing the HUD-51999 form. Views of responsible officials: There is no disagreement with the audit finding.