Finding Text
2024-002 – INTERNAL CONTROLS OVER COMPLIANCE – ALLOWABLE COSTS/COST PRINCIPLES
Significant Deficiency/Other Noncompliance
U.S. Department of Housing and Urban Development
ALN #: 14.871/14.879 – Housing Voucher Cluster
ALN #: 14.872 – Public Housing Capital Fund
CRITERIA
Factors affecting allowability of costs: Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal Awards: (a) Be necessary and reasonable for the performance of the Federal Award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal Award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. (g) Be adequately documented. (2 CFR Chapter 1 Part 200 § 200.403)
CONDITION
As disclosed in Finding 2024-001, we identified three (3) instances where invoices were missing proper approvals.
CAUSE
As disclosed in Finding 2024-001, the Authority did not establish an effective control environment or effective control activities over compliance.
EFFECT
The Authority is not in compliance with its Fiscal Policies and Procedures and its Federal Award program requirements.
QUESTIONED COSTS
None identified.
CONTEXT
We reviewed the Authority’s internal controls over compliance with federal awards.
REPEAT FINDING
Not a repeat finding.
RECOMMENDATION
We recommend the Authority’s management take an active role in reviewing their policies and monitoring the Authority’s compliance with those policies.
AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION