Finding Text
Housing Choice Voucher-CDFA#14.871 and Low Rent-CDFA#14.850- Special Tests Finding 2022-004-Underfunded Defined Contribution Plan Criteria and Specific Requirement To be in compliance with the Authority?s Plan Document for its Defined Contribution Plan, the Authority is required to contribute 7.5% of salaries for eligible, participating employees to the Plan on a timely basis. In addition, participating employees are required to contribute 5.5% of their salaries each payroll period. Condition Found For the years ended September 30, 2020 and 2021, the estimated underpayments were approximately $2,700 and $1,300, respectively. In the current year, we note an additional estimated under-payment of $2,634. Cause Unknown. Effect Federal regulations were not complied with. In addition, state and federal ERISA (Employment Retirement Security Act) rules were not complied with. Recommendation Management should provide the complete salary history paid since October 1, 2019 for all employees to the plan administrator. Hopefully this has already been partially done, since this was first an audit finding for the 2020 audit report that was released in late 2022. Plan administrators have software to build spreadsheets to figure the exact underpayments, whereas our numbers are estimates. Management should make sure that 5.5% of each paid salary is withheld from the participating employee paycheck and remitted, per Plan provisions. The Plan requires the Authority to pay 7.5% of each salary paid. Origination Date The finding originated in the prior year. For the 2020 audit, this was a management letter comment. View of Responsible Official We will comply with the auditor?s recommendation.