Finding Text
2022-002 Significant Deficiency in Internal Control Department of Housing and Urban Development ""See Schedule of Findings and Questioned Costs for chart/table"" Criteria or specific requirement: The Authority?s system of internal control should provide reasonable assurance that costs of services charged to Federal awards are allowable and in accordance with the applicable cost principles. Condition: The Authority?s computation of costs allocated to the grant for administrative wage was inaccurate. The allocation spreadsheet used to identify the amounts to allocate to the grants erroneously included an incorrect percentage to allocate one individual?s time. Cause: The Authority?s system of internal control is lacking a procedure for verifying the computations of costs allocated to the grant for administrative wages. Effect or Potential Effect: The administrative costs are calculated and charged to the Federal award incorrectly. Questioned Costs: None Context: The Authority?s annual time study is used for allocating administrative payroll costs to the Federal award. The allocation computations are performed on a monthly basis, however not reviewed by another individual. For one employee, the percentage of wages allocated to the grant was entered into the calculation incorrectly, resulting in an incorrect computation for July 2021 through March 2022. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Authority should review the setup of the allocation computation after each time study is performed to verify the accuracy of the allocation percentages and mathematical calculations. Views of Responsible Officials: Please refer to the Authority?s corrective action plan.