Core Issue: The Agency failed to secure required depository agreements for new bank accounts, leading to noncompliance with HUD regulations.
Impacted Requirements: HUD mandates that agencies have proper agreements to protect federal funds and ensure third-party rights.
Recommended Follow-Up: The Agency should reach out to financial institutions to obtain and sign the necessary depository agreements.
Finding Text
Finding 2022-003: Deposit Collateralization Material Weakness/Noncompliance Housing Choice Voucher Program ? 14.871 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: The Agency opened up new bank accounts during the year and did not obtain the required depository agreement. Cause: The Agency was unaware of the requirement. Effect or Potential Effect: The Agency was in noncompliance with HUD?s requirement to have proper depository agreements. Recommendation: The Agency should contact its financial institutions and provide them with the appropriate depository agreement to be signed. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.