Finding 61679 (2022-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-04-02

AI Summary

  • Core Issue: There is minimal segregation of duties in the accounting function, increasing the risk of undetected errors or fraud.
  • Impacted Requirements: Proper segregation of duties is essential for strong internal controls, but budget constraints limit staffing options.
  • Recommended Follow-Up: Management should enhance supervision and review of accounting processes to mitigate risks in the absence of additional personnel.

Finding Text

Finding No. 2022-001 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 ? Lower Income Housing Assistance Program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects CFDA #: 14.195 14.155 Questioned Costs: None Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Condition: There is minimal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, small projects, for sound economic conditions, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Cause: For sound economic reasons, the Corporation and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Recommendation: When this condition exists, management?s close supervision and review of accounting information is the best means of preventing or detecting errors and irregularities. Management Response: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.

Categories

HUD Housing Programs Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 61677 2022-001
    Material Weakness Repeat
  • 61678 2022-002
    Material Weakness Repeat
  • 61680 2022-002
    Material Weakness Repeat
  • 638119 2022-001
    Material Weakness Repeat
  • 638120 2022-002
    Material Weakness Repeat
  • 638121 2022-001
    Material Weakness Repeat
  • 638122 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.91M
14.195 Section 8 Housing Assistance Payments Program $611,160