Finding 577109 (2022-003)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2023-10-25
Audit: 1234
Organization: Indianapolis Housing Agency (IN)
Auditor: Somerset CPAS

AI Summary

  • Core Issue: There is a material weakness in internal controls over compliance, affecting the Agency's ability to manage federal awards properly.
  • Impacted Requirements: Compliance with 2 CFR 200.303 and internal control standards is not being met, leading to inadequate reviews and oversight in the finance department.
  • Recommended Follow-Up: Implement corrective actions as outlined in finding 2022-001, ensuring key personnel are involved to strengthen compliance oversight.

Finding Text

Material Weakness in Internal Control over Compliance - Appropriate Internal Control Structure Related to Compliance Requirements.Recommendation: See finding 2022-001. The recommendations noted for achieving appropriate oversight in the finance department apply as key individuals with knowledge of the compliance are considered critical for developing an appropriate control environment for internal controls over compliance. Views of Responsible Officials and Planned Corrective Actions: The Agency agrees with the recommendation. See the Corrective Action Plan for the Agency’s response and planned completion date. Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Agency must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: This finding has a pervasive effect on the Agency’s ability to maintain compliance over its award programs. The condition and context described in finding 2022-001 also relates to this finding. In addition to the condition and context noted above the following deficiencies were identified which stemmed from the deficiencies noted above and had an impact solely on internal control over compliance. a) Existing compliance requirements are not appropriately reviewed by management. i) Review was not completed to support tenants waitlist progression through the Housing Choice Voucher program. ii) Housing Choice Voucher tenant files are not appropriately reviewed to ensure documentation retained supports compliance requirements. iii) HUD reporting is not regularly reconciled to the trial balance. iv) Lack of controls in place to prevent transfers and use of restricted funds for unallowable purposes. This finding is a repeat finding of 2021-003 and 2020-003. Cause and Effect: As detailed above in finding 2022-001, in our opinion, the predominate reason for the finding is due to the lack of appropriate oversight in the finance department and the finance department not following the written policies of the Agency do to staffing constraints. The material weakness resulted in the noncompliance findings described below.

Categories

Internal Control / Segregation of Duties HUD Housing Programs Allowable Costs / Cost Principles Material Weakness Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 659 2022-003
    Material Weakness Repeat
  • 660 2022-004
    -
  • 661 2022-005
    Material Weakness Repeat
  • 662 2022-006
    - Repeat
  • 663 2022-007
    -
  • 664 2022-008
    - Repeat
  • 665 2022-009
    -
  • 666 2022-010
    -
  • 667 2022-003
    Material Weakness Repeat
  • 668 2022-004
    -
  • 669 2022-005
    Material Weakness Repeat
  • 670 2022-006
    - Repeat
  • 671 2022-007
    -
  • 672 2022-008
    - Repeat
  • 577101 2022-003
    Material Weakness Repeat
  • 577102 2022-004
    -
  • 577103 2022-005
    Material Weakness Repeat
  • 577104 2022-006
    - Repeat
  • 577105 2022-007
    -
  • 577106 2022-008
    - Repeat
  • 577107 2022-009
    -
  • 577108 2022-010
    -
  • 577110 2022-004
    -
  • 577111 2022-005
    Material Weakness Repeat
  • 577112 2022-006
    - Repeat
  • 577113 2022-007
    -
  • 577114 2022-008
    - Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $60.27M
14.872 Public Housing Capital Fund $2.27M
14.850 Public and Indian Housing $1.73M
14.879 Mainstream Vouchers $529,342
14.231 Emergency Solutions Grant Program $196,547
14.896 Family Self-Sufficiency Program $133,418