Finding Text
2023-002 – ACTIVITIES ALLOWED OR UNALLOWED
Other Matter/Significant Deficiency
U.S. Department of Housing and Urban Development
CFDA #: 14.871 – Housing Choice Voucher Program
CRITERIA
The Pembroke Housing Authority has a policy that all checks require the signature from 2 board members. The dual signature policy was established to reduce the likelihood that personnel will write improper checks to themselves or write checks to a fictitious company. By requiring two signatures, the Authority is verifying that both signers agree that the payment is proper and reasonable.
CONDITION
We reviewed the check images included on the bank statements for the administration account and the Section 8 account for the fiscal year and identified 370 instances where a check signature stamp was used and 17 instances where the check had only 1 signature. The check stamp used included the signature of an individual who is no longer a member of the Board.
CAUSE
The Authority’s controls related to reviewing and updating the authorized signatories on bank accounts was insufficient.
EFFECT
As a result of not following its policy, there is an increased likelihood of unauthorized disbursements being made.
QUESTIONED COSTS
None Identified.
CONTEXT
The Authority processed 770 checks from these 2 accounts of which 387 did not follow their policy regarding authorized check signers.
REPEAT FINDING
Not a repeat finding.
RECOMMENDATION
We recommend that management review the authorized signatories on all accounts, updating them if necessary, and ensure that disbursements have two valid signatures before processing the payment.
AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION
See Corrective Action Plan.