Finding 555210 (2024-002)

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing (Non-major Program) and Section 8 Housing Choice Vouchers Programs Federal Assistance Listing Number: 14.850 and 14.871 Noncompliance – B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements. Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.