Finding Text
Finding 2020-003: Missing Depository Agreements (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: Per 24 CFR Section 982.156, housing authorities are required to enter into depository
agreements with their financial institutions in the form required by the U.S. Department of Housing
and Urban Development ("HUD").
Condition: The Housing Commission of Talbot (the "Commission") did not set up depository
agreements with its financial institutions.
Context: The Commission has financial institutions that require depository agreements.
Effect: The Commission risks violating federal regulations, not maintaining proper safeguards over
federal funds, and not providing third-party rights to HUD.
Cause: The Commission did not have the internal controls over compliance or compliance procedures
in place to set up a depository agreement with their financial institutions.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: We recommend that the Commission review and enhance its internal
controls over compliance, policies and procedures regarding depository agreements with its financial
institutions and obtain depository agreements with all of its financial institutions.
Views of Responsible Officials: The Commission has had prior communications with the Bank
regarding the depository agreements requirements. The Bank would not sign due to internal policies.
The Commission will coordinate discussions between our HUD local field office and the Bank to
discuss the requirements for obtaining a depository agreement.