Finding 5707 (2023-005)

Significant Deficiency

Requirement

ABN

Questioned Costs

Year

2023

Accepted

2023-12-20

Audit: 7706

Organization: Afiya Apartments INC (OR)

Auditor: Jones & Roth PC

AI Summary

Core Issue: Afiya Apartments processed and paid the same invoice twice, indicating a significant deficiency in internal controls over compliance.
Impacted Requirements: This affects the compliance with the HUD program's requirements for allowable activities and costs, as funds must only be used for necessary project expenses.
Recommended Follow-up: Management should assess and improve internal controls to prevent duplicate payments and ensure proper tracking of paid invoices.

Finding Text

Finding 2023-005 Type of Finding: Significant deficiency in internal control over compliance and immaterial noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirements: Allowable Activities, Allowable Costs and Special Tests and Provisions – Use of Project Funds Criteria: PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project as provided for in the Regulatory Agreement. Condition: There was an invoice that was processed and paid twice by Afiya Apartments with project funds. The invoice was for $99. The organization’s internal controls did not prevent or detect and correct the error. Cause: There were not proper internal controls in place to prevent or detect and correct the duplicate transaction from being processed and paid with project funds. Effect: An invoice was paid twice resulting in immaterial noncompliance with the major program compliance requirements listed above. Questioned Costs: None. Repeat Finding: No. Context: We noted one instance in our sample of 40 transactions. Our sample was not a statistically valid sample. Recommendation: We recommend management evaluate the design and implementation of its internal controls over compliance with respect to project disbursements to ensure there is a process to identify invoices that have been paid so as to avoid duplicate payments. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Corrective Action Plan

Management’s Response and Planned Corrective Actions: 1. The name of the contact person(s) responsible for the corrective action a. Kathleen Broadhurst, Sr. Director of Finance/ShelterCare 2. The corrective action planned: a. ShelterCare, as new managing agent, will be utilizing the same AP invoice naming conventions that we currently utilize for ShelterCare’s books to ensure we do not duplicate a payment to a vendor. 3. The anticipated completion date: a. 5/1/2023 – when ShelterCare took over as new managing agent.

Other Findings in this Audit

5703 2023-001

Material Weakness Repeat
5704 2023-002

Significant Deficiency
5705 2023-003

Significant Deficiency
5706 2023-004

Significant Deficiency
582145 2023-001

Material Weakness Repeat
582146 2023-002

Significant Deficiency
582147 2023-003

Significant Deficiency
582148 2023-004

Significant Deficiency
582149 2023-005

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.181	Supportive Housing for Persons with Disabilities	$2.07M