Finding Text
2023-004 U.S. Department of Housing and Urban Development
Federal Financial Assistance Listing # 14.157
Supportive Housing for the Elderly (Section 202)
Project Rental Assistance Contract Number: ND99S091001
Project Number: 094-EE008-NP-WAH
Activities Allowed/Unallowed and Allowable Costs/Cost Principles/Eligibility/Special Tests and Provisions
Material Weakness in Internal Control over Compliance
Criteria – CFR Section 200.334 indicates that financial records, supporting documentation, and all other entity records pertinent to federal awards must be retained for a period of three years.
Condition – The Organization does not have an internal control system designed to provide for the appropriate retention of documentation supporting the transactions of the Organization and eligibility determinations of tenants at the project. As a result, through the transition of management, supporting documentation for expense transactions and tenant eligibility were destroyed and not able to be recreated.
Cause – Due to a lack of control policies and proper enforcement, documents were inadvertently destroyed.
Effect – Inadequate controls over document retention for the Organization could result in inaccurate transactions being recorded within the Organization’s financial statements or ineligible tenants occupying the units, which could result in non-compliance.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Repeat Finding from Prior Year(s) – Yes, prior year finding 2022-004
Recommendation – It is the responsibility of management and those charged with governance to develop and enforce proper controls and monitoring over document retention policies.
Views of Responsible Officials – Management agrees with the finding.