Finding Text
Department of Housing and Urban Development
Federal Financial Assistance Listing #14.128
Section 242 – Mortgage Insurance - Hospitals
Reporting
Material Weakness in Internal Control Over Compliance and Noncompliance
Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The Section 242 – Mortgage Insurance - Hospitals Program requires quarterly reports and certain annual reports. For the year ended July 31, 2024, the Organization failed to submit certain reports in accordance with HUD requirements and failed to have a documented review and approval of some of the reports prior to their submission to HUD.
Cause: The Organization did not follow their internal control policy to ensure the required reports was filed correctly and with the appropriate level of review and approval.
Effect: Some required reports were not submitted in accordance with loan requirements and others were submitted without evidence of review of the report by someone other than then preparer.
Questioned Costs: None reported.
Context: There was a total of seven reports required to be submitted for the year ended July 31, 2024. All were selected for testing. Three were not submitted as required and two more that were submitted as required did not show evidence of review prior to submission to HUD.
Repeat Finding from Prior Years: Yes, Finding 2023-004.
Recommendation: We recommend the Organization enhance internal control policies to ensure required reports are filed timely and accurately with documented support for their review and approval.
Views of Responsible Officials: Management agrees with the finding.