Finding Text
Department of Housing and Urban Development
Federal Financial Assistance Listing #14.128
Section 242 – Mortgage Insurance ‐ Hospitals
Reporting
Material Weakness in Internal Control Over Compliance and Noncompliance
Criteria: The OMB Compliance Supplement requires that non‐federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The Section 242 – Mortgage Insurance ‐ Hospitals Program requires quarterly reports and certain annual reports. For the year ended July 31, 2023, the Organization failed to file the annual budget prior to the start of the year.
Cause: The Organization did not follow their internal control policy to ensure the required report was filed.
Effect: The required report was not submitted in accordance with loan requirements.
Questioned Costs: None reported.
Context: There were a total of eight reports required to be submitted for the year ended July 31, 2023. Three were selected for testing. Of the three selected, one was not submitted as required. Through additional inquiry, there were no other reports identified as not being submitted.
Repeat Finding from Prior Years: Yes, Finding 2022‐004.
Recommendation: We recommend the Organization enhance internal control policies to ensure required reports are filed timely and accurately.
Views of Responsible Officials: Management agrees with the finding.