Finding Text
Finding 2023-002
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Allowable Costs and Cost Principles
Repeat Findings: Yes
Criteria:
Except where otherwise authorized by statute, a cost must be adequately documented in order to be allowable under Federal awards.
Condition and Context:
The allocation rate of the employees to the Housing Choice Voucher program was unsubstantiated. The City has no documentation, time study, or time sheets to prove that the 80% allocation is accurate. The rate being used was based on a discussion with the employee once they were hired and has not been updated since then.
Cause:
The City does not have an official policy to document or determine allocation rates of employees to funds other than informal discussions. The City also does not complete time studies of employees.
Effect or Potential Effect:
Payroll costs could be charged to the program at an improper allocation rate.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City does annual time studies or an annual review of timesheets to determine accurate allocation rates and then document this within employee personnel files.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.