Finding Text
Findings and Questioned Costs Related to the Audit of Federal Awards (continued)
Finding: 2023‐004
U.S. Department of Housing & Urban Development
Program Name: Public Housing Operating Fund
AL Number: 14.850
Material Non-Compliance
Material Weakness, Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal
control procedures in place to ensure that activities allowed and allowable cost policies are
implemented and functioning as intended. Management must monitor activities under federal
awards to assure compliance with federal requirements.
Management should have an adequate system of internal control procedures in place to properly
review and assess the eligibility of payroll costs to ensure the accuracy of the payroll costs charged
is within program requirements. In accordance with 24 CRF section 990, verification of accuracy of
information used in determining payroll costs to be charged to the program should be maintained.
Condition: Due to a network event, the disaster recovery plan was not sufficient to recover
documents on a timely manner. As a result, the approved payroll time sheets were not recovered.
Context: Of the 1,540 expenditures during the current year valued at $749,487, we examined 40
(valued at $134,796) and determined that 7 (18% valued at $13,369) expenditures did not have
proper documentation to support accuracy of payroll costs.
Effect: Salaries allocated to the program did not have approved time sheets to verify the accuracy
of the hours charged.
Cause: Due to the network event, the timesheets were not recovered.
Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned
costs when likely questioned costs are greater than $25,000. Even though the sample results only
identified $13,369 in known questioned costs, if tests were extended to the entire population,
questioned costs could exceed $25,000.
Recommendation: Management should strengthen internal control procedures over activities
allowed and allowable costs and strengthen the disaster recovery plan.
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this
finding. Please refer to the Corrective Action Plan section of this report.