Finding 971032 (2022-005)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2024-04-25

AI Summary

  • Core Issue: Internal control deficiencies led to inadequate documentation for allowable costs in the Housing Choice Voucher and Low Rent Public Housing programs.
  • Impacted Requirements: Compliance with 2 CFR part 200, subpart E, which mandates that costs must be necessary, reasonable, and well-documented.
  • Recommended Follow-Up: Management should ensure all disbursements are properly documented and implement controls to identify unsupported check disbursements.

Finding Text

ALN 14.850 & 14.871 – Public & Indian Housing and Housing Choice Voucher Cluster – Allowable Costs Condition and Criteria: In accordance with the cost principles under 2 CFR part 200, subpart E, costs must be necessary and reasonable for the performance of the Federal award, conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E, and be adequately documented. During our audit, it was determined that internal control deficiencies over compliance existed related to the Authority’s compliance with the Housing Choice Voucher and Low Rent Public Housing Program’s allowable costs/cost principles compliance provisions. Identified control and compliance deviations included costs that were not adequately documented. Amount of Questioned Costs: $8,872 Context: The lack of supporting documentation was observed for 7 out of the 40 check disbursements tested during our audit, including check disbursements from both Low Rent Public Housing and Housing Choice Voucher programs. The Authority was unable to locate supporting documentation for 7 of the 40 checks disbursements tested including check vouchers, invoices, or pay requests. Cause: The Authority’s management’s internal controls over the Low Rent Public Housing and Housing Choice Voucher Program’s allowable costs/cost principles compliance provision that were in place were deficient. Staff who had the ability to make purchases and procure contracts did not adequately follow the cost principles included in 2 CFR part 200, subpart E, and therefore the Authority did not have adequate support for check disbursements. Effect: The Authority could incur costs that are unallowable and that are not necessary or reasonable. These internal control deficiencies could result in a possibility that errors or irregularities relating to costs can exist and not be detected by the Authority’s internal controls. Auditor’s Recommendation: We recommend that the Authority’s management perform the necessary steps to ensure that all disbursements are sufficiently documented and supported by adequate backup. We recommend the Authority implement controls to detect when check disbursements do not have adequate support in accordance with 2 CFR part 200, subpart E. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

Categories

Questioned Costs Allowable Costs / Cost Principles HUD Housing Programs

Other Findings in this Audit

  • 394585 2022-002
    Significant Deficiency Repeat
  • 394586 2022-005
    Significant Deficiency
  • 394587 2022-006
    Significant Deficiency
  • 394588 2022-001
    Significant Deficiency Repeat
  • 394589 2022-004
    Significant Deficiency Repeat
  • 394590 2022-005
    Significant Deficiency
  • 971027 2022-002
    Significant Deficiency Repeat
  • 971028 2022-005
    Significant Deficiency
  • 971029 2022-006
    Significant Deficiency
  • 971030 2022-001
    Significant Deficiency Repeat
  • 971031 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $559,204
14.850 Public and Indian Housing $75,237
14.870 Resident Opportunity and Supportive Services - Service Coordinators $74,588
14.871 Section 8 Housing Choice Vouchers $71,684