Finding 620955 (2022-004)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-03-27
Audit: 38705
Auditor: Marcum LLP

AI Summary

  • Core Issue: The Authority lacks proper documentation for purchase approvals, risking ineligible costs being charged to federal programs.
  • Impacted Requirements: Costs must be necessary, reasonable, and adequately documented to be allowable under federal awards.
  • Recommended Follow-Up: Implement written authorization procedures for purchasing to ensure compliance and proper documentation.

Finding Text

2022-004 ? ALLOWABLE COSTS/COST PRINCIPLES Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a Be necessary and reasonable for the performance of the Federal award and be allocable thereto und these principles. b Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonFederal entity. d Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e Be determined in accordance with generally accepted accounting principles GAAP, except, for state and local governments and Indian tribes only, as otherwise provided for in this Part. f Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g Be adequately documented. 2 CFR Chapter 1 Part 200 200.403 CONDITION The Authority?s purchasing process does not adequately document approval of the purchase or coding of the transaction. CAUSE The Authority does not utilize purchase orders and has no consistent alternative procedure for documenting the authorization of purchases. EFFECT Ineligible purchases could be processed and charged to the Authority?s federal programs without detection. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 40 purchase transactions. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority institute written authorization procedures for purchasing. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 44512 2022-003
    Material Weakness
  • 44513 2022-004
    Significant Deficiency
  • 44514 2022-005
    Significant Deficiency Repeat
  • 44515 2022-006
    Significant Deficiency
  • 44516 2022-003
    Material Weakness
  • 44517 2022-004
    Significant Deficiency
  • 620954 2022-003
    Material Weakness
  • 620956 2022-005
    Significant Deficiency Repeat
  • 620957 2022-006
    Significant Deficiency
  • 620958 2022-003
    Material Weakness
  • 620959 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $2.42M
14.872 Public Housing Capital Fund $2.04M
14.871 Section 8 Housing Choice Vouchers $1.89M
14.871 Section 8 Housing Choice Vouchers - Emergency Housing Vouchers $90,672
14.870 Resident Opportunity and Supportive Services - Service Coordinators $60,951
14.879 Mainstream Vouchers $52,664
14.871 Section 8 Housing Choice Vouchers - Cares Act $21,409
14.879 Mainstream Vouchers - Cares Act $892