Finding Text
FINDING #2023-004 OVERPAYMENT OF PAYROLL EXPENSES
Program: The Federal Programs are Section 811 Capital Advance (Assistance Listing 14.181) and Section 8 Housing Assistance Payments (Assistance Listing 14.195) issued by the U.S. Department of Housing and Urban Development.
Type of Finding: Allowable Costs
Condition: The management agent miscalculated payroll tax and health insurance expenses which were then reimbursed by the entity, resulting in an overpayment of $8,791 in payroll taxes and $7,152 of insurance, totaling $15,943. The management agent reimbursed the entity $6,394 on March 29, 2019, and $7,929 on August 4, 2020, resulting in a balance of $1,620 on December 31, 2020. This amount was still due at December 31, 2023.
Criteria: The Entity should pay only those expenses that are required and necessary for the operation of the entity. Management should ensure that the proper controls are in place to prevent the payment of unallowable expenses.
Effect: The Entity overpaid payroll and insurance expenses in the amount of $15,943.
Cause: The management agent miscalculated payroll expenses allocated to the property.
Recommendation: We recommend that the management agent reimburse the entity for the overpayment of payroll expenses and implement additional controls to ensure that these fees are properly calculated in the future.
Views of Responsible Officials and Planned Corrective Action: The management agent reimbursed the entity the $1,620 on March 4, 2024. They have also contracted with an outside payroll organization to administer payroll.
This finding has been repeated since 2021. Prior year finding #2022-003.