Finding 600387 (2022-002)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-03-30

AI Summary

  • Core Issue: Inconsistent and undocumented allocations of administrative costs to the Public Housing Agency were identified, leading to potential mischarges.
  • Impacted Requirements: The requirement for consistent annual reviews of administrative cost allocations was not met, risking improper allocation rates.
  • Recommended Follow-Up: Conduct a thorough analysis of administrative cost allocations and ensure updated, approved allocations are communicated to relevant finance personnel.

Finding Text

Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Categories

Allowable Costs / Cost Principles HUD Housing Programs

Other Findings in this Audit

  • 22742 2022-002
    Significant Deficiency Repeat
  • 22743 2022-003
    Material Weakness Repeat
  • 22744 2022-004
    Significant Deficiency
  • 23942 2022-002
    Significant Deficiency Repeat
  • 23943 2022-003
    Material Weakness Repeat
  • 23944 2022-004
    Significant Deficiency
  • 23945 2022-002
    Significant Deficiency Repeat
  • 23946 2022-003
    Material Weakness Repeat
  • 23947 2022-004
    Significant Deficiency
  • 599184 2022-002
    Significant Deficiency Repeat
  • 599185 2022-003
    Material Weakness Repeat
  • 599186 2022-004
    Significant Deficiency
  • 600384 2022-002
    Significant Deficiency Repeat
  • 600385 2022-003
    Material Weakness Repeat
  • 600386 2022-004
    Significant Deficiency
  • 600388 2022-003
    Material Weakness Repeat
  • 600389 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $923,036
14.871 Section 8 Housing Choice Vouchers $227,318
15.506 Water Desalination Research and Development Program $182,975
16.738 Edward Byrne Memorial Justice Assistance Grant Program $7,983