Finding Text
SECTION III Findings and Questioned Costs C. Material Weakness in Internal Control Finding related to Compliance with Federal Regulations Finding 2022-003 Internal Control over Representative Payee Accounts Condition: During audit procedures, we selected a random sample of 13 checks disbursed from the Representative Payee bank account for control testing. From that sample we removed two checks as void and two checks that were issued for rent and utilities to an outside company. The remaining sample of eight checks issued to/for payees were examined for authorization by the person requesting the check, supporting documentation and the approval of authorizing personnel. Of that sample of the remaining nine checks that were for payments to client, the following was noted: Four of nine (44%) noted ?signed by phone?, with no additional notation of date of contact One (11%) in nine had no authorizing signature, and One (11%) in nine had note that the ?information could not be located?. The residents who funds are managed under the Representative Payee Accounts may reside in federal funded housing. Cause: The Organization did not have adequate internal control of supervisory review of resident payee authorization procedures to detect the payments did not have adequate, sufficient, and documented authorization to release client funds. Criteria: Social Security Administration (SSA), A Guide for Representative Payees, Page 7: ?Organizations that serve as payees The organization must make the account and supporting records available when we ask for them.? Frequently Asked Questions (FAQs) for Representative Payee? ?Social Security law and regulations require payees to use the payments they receive for the current needs of the beneficiary and in their best interests. Required Duties: Provide all records of how payment is spent or saved to SSA upon request. Complete reports accounting for your used of payments, as required?? TRANSITIONAL RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 (continued) SECTION III Findings and Questioned Costs Effect: Disbursements from Representative Payee accounts are to follow Federal Guidelines. Failure to follow such guidelines results in failure to follow the fiduciary responsibility of acting on behalf of those who cannot act for themselves. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. Recommendation: We recommend the Organization develop and follow internal control procedures for the supporting documentation for representative payee accounts which follow the internal control objectives to safeguard assets from unauthorized acquisition (fraud) and reasonable assurance that errors and omission are detected by employees in their normal functions. Management?s Response: Management concurs with the finding and recommendation and is taking appropriate corrective action. Submitted by: Darcell Slovek-Walker, LMHC Chief Executive Officer