Finding Text
Criteria: PIH Notice 96-33 requires all funds in excess of FDIC coverage be collateralized with specific approved governmental securities held in the Authority’s name.
Condition: The Authority did not have collateralization for $1,161,671 invested as of March 31, 2024, which was not insured by FDIC or invested in U.S. Treasury Obligations. There were no questioned costs applicable to this Finding.
Potential Effect: Noncompliance with a federal requirement. Had there been a bank failure or theft, the Authority may not have recovered up to 1,161,671 of federal funds.
Perspective Information: The Authority received its April 2024 housing assistance payments and administrative fees grants early, on March 29, 2024, totaling $1,161,671. The bank did not collateralize the deposits upon receipt, as of March 29, 2024.
Recommendation: We recommend the Authority monitor their bank balances with financial institutions regularly to ensure the banks are sufficiently collateralizing the Authority’s deposits timely.
Reply: The Authority’s Chief Executive Officer, Martell Armstrong, has assumed the responsibility of maintaining sufficient collateral and will ensure the monitoring of account balances regularly.