Core Issue: The Authority is using an outdated 1991 depository agreement instead of the current version required by HUD.
Impacted Requirements: This noncompliance with HUD regulations jeopardizes the safeguarding of federal funds.
Recommended Follow-Up: The Authority needs to secure a current depository agreement and implement a monitoring system for future updates.
Finding Text
Finding 2023-005: Deposit Collateralization
Housing Choice Voucher Program – 14.871
Material Weakness/Noncompliance – Special Tests and Provisions
Repeat Finding 2022-003
Criteria: The Authority is required to enter into a current depository agreement with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD.
Condition: The Authority did have a HUD depository agreement with its bank but the form was the 1991 version and not the current version required by HUD.
Cause: The Authority was not monitoring to ensure it had the current depository agreement
Effect or Potential Effect: The Authority was in noncompliance with HUD’s requirement to have proper depository agreements.
Recommendation: The Authority should obtain a current depository agreement with its bank and monitor to ensure it stays up-to-date with the form for any new versions.
View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.