Finding Text
Cash Management
Public Housing Capital Fund - AL No. 14.872
Significant Deficiency in Internal Controls
Other Matter to Reported Under the Uniform Control
Condition: It was noted that funds were overdrawn during the year and never paid out to a
vendor. Out of the 26 grant drawdowns during the year, 11 samples were tested and the
following was noted:
6 drawdowns were missing invoice documentation.
4 drawdowns were missing payment documentation.
Context: The auditor haphazardly selected 11 grant drawdowns from the population, which
we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and
supporting documentation to ensure proper procedures are being followed and that the
Authority is in compliance with HUD requirements.
Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6))
requires grant funds received by the Authority to be properly spent within 72 hours of receipt.
HUD regulations require that proper documentation be maintained for all Capital Fund
Program per 24 CFR 905.326.
Cause: The Authority experienced staff turnover in the finance department as well as difficulty
replacing personnel knowledgeable with HUD and grant reporting requirements.
Effect: The Authority is unable to provide supporting documentation for the capital funds that
were drawn during the year.
Questioned Costs: $155,318
Auditor’s Recommendations: The Authority should continue to develop and implement
internal controls over grant reporting and provide training opportunities to staff.
View of Responsible Officials: See Corrective Action Plan.