Finding 515797 (2024-001)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: All disbursements from the regular operating account must be supported by approved invoices, bills, or other supporting documentation. Condition: The Organization did not have a formal policy for invoice approval prior to payment for part of the fiscal year. Questioned Costs: None Context: During our audit, we noted that the Organization did not consistently approve invoices prior to payment. 10 of 40 disbursements tested did not have proper invoice approvals. Cause: The entity has a small finance department. Effect: Failure to approve invoices prior to payment increases the risk of unauthorized, inaccurate, or fraudulent payments. This could lead to financial misstatements and non-compliance with applicable regulations. Recommendation: CLA recommends the organization develops and enforces a policy requiring the approval of all invoices before payment. Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Starting in April 2024, Webster began implementing Silverstone Living’s invoice approval policy. The authorized signers for invoices are the Executive Director, the CFO, and the department heads.