Finding 613264 (2022-005)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-08-03
Audit: 24037
Organization: Milford Housing Authority (NE)
Auditor: Hbe LLP

AI Summary

  • Core Issue: The Authority lacks effective internal controls over disbursements, failing to ensure detailed review and approval of costs before payment.
  • Impacted Requirements: This violates 2 CFR 200.303 and the Authority's own accounting policies regarding invoice review and approval.
  • Recommended Follow-Up: The Authority should enhance its internal control system to ensure thorough review and documentation of all disbursements, particularly for Federal awards.

Finding Text

2022-005 ? Internal Controls over Compliance for Allowable Costs Identification data: U.S. Department of Agriculture ? Rural Rental Housing Loan, Assistance Listing No. 10.415. Criteria: 2 CFR ?200.303 requires the Authority to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Authority is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the Authority?s accounting policies and procedures for accounts payable requires that all invoices, attachments, and approvals be reviewed for completeness and accuracy of accounting coding before the payment is authorized. The Organization did not maintain a system of internal control over disbursements paid by ACH, including those claimed under the Federal awards, with sufficient detail to provide for the review and approval of the ACH disbursements at an individual level prior to payment. Condition: The Authority did not maintain a system of internal control to provide for the detailed review and approval of costs, including those claimed under the Federal awards. Cause: A breakdown in the Authority?s internal controls over expenses did not allow the Authority to sufficiently evidence review and approval of costs, including those claimed under the Federal awards. Effect or potential effect: The control deficiency is a significant deficiency that may have caused the Authority to pay unauthorized, invalid, or unallowable costs, including those claimed under Federal awards. Identification as a repeat finding: This is a repeat finding from the immediate previous audit, 2021-006. Recommendation: The Milford Housing Authority should review its system of internal control over expenses to determine improvements that can be made to ensure the Authority appropriately reviews and approves at a detailed level prior to payment. The Authority should also incorporate a procedure to evidence the review and approval of the responsible individual. Views of responsible officials and Planned Corrective Actions: The Milford Housing Authority understands the need to review and approve disbursements and has implemented procedures to provide for the review and approval of all invoices at a detailed level which will be evidenced by an initial or other documentation.

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 36821 2022-004
    Significant Deficiency Repeat
  • 36822 2022-005
    Significant Deficiency Repeat
  • 613263 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.415 Rural Rental Housing Loans $1.16M
10.427 Rural Rental Assistance Payments $63,589
14.195 Section 8 Housing Assistance Payments Program $60,696