Finding Text
Agency: U.S. Department of Housing and Urban Development
Federal Assistance Listing Number: 14.157, Supportive Housing for the Elderly
Criteria: The Project is required to have processes and controls in place to ensure appropriate and allowable amounts are charged to the Project. 24 CFR Section 891.400(e) and 891.600(e) outline the required uses of project funds for only operational purposes of the Project.
Statement of condition: The Project was overcharged salary and related benefits. The amount was identified during the audit and was corrected by management during the year ending December 31, 2023.
Questioned Costs: Questioned costs totaled $21,005.
Context: One individual's payroll and benefits were inappropriately charged to the Project. Upon further investigating, four (4) total individuals were impacted by the changes in staffing assignments, but further testing verified the other individuals were accurately charged to the correct programs.
Effect: The Project was charged payroll and related benefits that were not for operational purposes of the Project.
Cause: Controls in place overlooked changes in staffing assignments, which led to additional charges to the Project that did not relate to the Project.
Recommendation: We recommend management review their processes and controls surrounding payroll and benefits to ensure appropriate amounts are charged to the Project.
Management's response: Leadership training around the importance of proper time allocation and methods for tracking and confirming proper time recording was held in January of 2024. LSS payroll department leadership presented this training in conjunction with housing department senior leadership. All LSS HUD property management staff is scheduled to receive this training in March of 2024. In addition, all HUD property managers were provided copies of their budgeted hours for each of their Projects. HUD property management staff was reminded of the importance of striving to stay within those hours, and of proactively working with leadership should project needs necessitate change. Housing Senior Leadership meets monthly with HUD leadership. In these meetings emphasis will be placed on reviewing actual versus budgeted results related to payroll costs. Leadership will work with LSS finance staff to investigate the validity in variances identified.