Finding Text
Finding 2023-003
Department of Housing and Urban Development
14.871 Housing Voucher Cluster
Non-compliance with Depository Agreement Requirement
Repeat Findings: No
Criteria:
Public Housing Authorities are required to enter into depository agreements with their financial institutions in the form required by the U.S. Department of Housing and Urban Development (HUD). The agreements serve as safeguards for federal funds and provide third party rights to HUD. Among the terms in many agreements are requirements for funds to be placed in an interest-bearing account (24 CFR section 982.156).
Condition and Context:
The City has not entered into a depository agreement with their financial institution since January 2020 which expired in January 2021. There was no depository agreement active for fiscal year 2023.
Cause:
The City does not have an effective policy in place to track their HUD depository agreement expiration.
Effect or Potential Effect:
HUD funds are not properly deposited or safeguarded.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the City enters into a depository agreement with their HUD funds financial institution immediately and implements a system to track the expiration of the agreement to avoid lapses in HUD requirements.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.