Finding Text
Program:
Community Development Block Grant Entitlement Grants Cluster.
Federal Assistance Listing Number: 14.218
Criteria:
Per the OMB Compliance Supplement, grantees must accurately account for any program income generated from the use of CDBG funds and must treat such income as additional CDBG funds which are subject to all program rules.
Condition:
PHDC did not journalize $465,246 in program income during the year. $4,034,754 of program income was accounted for in the general ledger, however, $4,500,000 was deducted from the invoices submitted to the Division of Housing and Community Development (“DHCD”).
Cause:
During the period under audit, there was not a formal reconciliation and review process over CDBG program income.
Effect:
PHDC’s program income balance per its general ledger was understated.
Recommendation:
We recommend that PHDC implement a reconciliation process for comparing the general ledger recorded program income to the amounts deducted from DHCD invoices.
Management’s Response to Finding:
PHDC is in agreement with this finding and will complete and implement a corrective action plan.