FAC Explorer

Finding 5581 (2022-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-12-19
Audit: 7418
Organization: Township of Hamilton (NJ)
Auditor: Mercadien PC CPAS

AI Summary

  • Issue: The Township incorrectly drew down federal funds totaling $84,951.58 due to discrepancies between requested and incurred expenses.
  • Requirements Impacted: Federal funds must only be drawn for actual expenses incurred, and errors must be corrected promptly.
  • Recommended Follow-Up: Implement a review process for federal drawdowns by program management before submission to HUD.

Finding Text

Finding 2022-002 Assistance Listing 14.218 Community Development Block Grants/Entitlement Grants Criteria Federal funds drawn down should be for activities incurred. Condition For two of nine drawdowns selected for testing, the amount of drawdown requested did not agree to the amount of expenses incurred. The funds requested in error were received and the funds were not returned to the U.S. Department of Housing and Urban Development during the accounting period. Cause Failure to review drawdown and supporting data prior to submission. Effect The Township received federal funds in error. The known error from the two draws totaled $84,951.58. Perspective Information This finding represents an isolated problem. Recommendation The Township should ensure that federal drawdowns are reviewed by program management prior to submission to HUD for reimbursement. View of Responsible Official The Township is in agreement with this finding and have created a payable for the overdrawn funds and implemented a corrective action plan.

Corrective Action Plan

Finding No. 2022-002 Criteria Federal funds drawn down should be for activities incurred. Condition For two of nine drawdowns selected for testing, the amount of drawdown requested did not agree to the amount of expenses incurred. The funds requested in error were received and the funds were not returned to the U.S. Department of Housing and Urban Development during the accounting period. Corrective Action The Township will review the program drawdown requests against general ledger disbursement records to ensure that federal drawdowns are properly supported and reviewed by program and financial management prior to submission to HUD for reimbursement. The Township will also establish a payable due to HUD and net a future drawdown request for the overdrawn amount. Responsible Party Township Chief Financial Officer Anticipated Completion Date Corrective action procedures are already in place and operating.

Categories

Cash Management HUD Housing Programs

Other Findings in this Audit

  • 5580 2022-001
    Significant Deficiency
  • 582022 2022-001
    Significant Deficiency
  • 582023 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $2.28M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.08M
14.218 Community Development Block Grants/entitlement Grants $632,180
21.019 Coronavirus Relief Fund $29,068
20.616 National Priority Safety Programs $7,500