Finding 971503 (2021-005)

Material Weakness
Requirement
AB
Questioned Costs
$1
Year
2021
Accepted
2024-04-30

AI Summary

  • Core Issue: The Authority misused COVID funds, leading to a material weakness in compliance with federal guidelines.
  • Impacted Requirements: Lack of proper documentation and internal controls over federal awards as per 2 CFR 200.303(a).
  • Recommended Follow-Up: Management should review grant requirements to ensure future expenditures align with received funds.

Finding Text

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties Material Weakness Reporting

Other Findings in this Audit

  • 395061 2021-005
    Material Weakness
  • 395062 2021-006
    Significant Deficiency
  • 395063 2021-007
    Significant Deficiency
  • 395064 2021-008
    Significant Deficiency
  • 395065 2021-009
    Significant Deficiency
  • 395066 2021-005
    Material Weakness
  • 395067 2021-006
    Significant Deficiency
  • 395068 2021-007
    Significant Deficiency
  • 395069 2021-008
    Significant Deficiency
  • 395070 2021-009
    Significant Deficiency
  • 395071 2021-005
    Material Weakness
  • 395072 2021-006
    Significant Deficiency
  • 395073 2021-007
    Significant Deficiency
  • 395074 2021-008
    Significant Deficiency
  • 395075 2021-009
    Significant Deficiency
  • 971504 2021-006
    Significant Deficiency
  • 971505 2021-007
    Significant Deficiency
  • 971506 2021-008
    Significant Deficiency
  • 971507 2021-009
    Significant Deficiency
  • 971508 2021-005
    Material Weakness
  • 971509 2021-006
    Significant Deficiency
  • 971510 2021-007
    Significant Deficiency
  • 971511 2021-008
    Significant Deficiency
  • 971512 2021-009
    Significant Deficiency
  • 971513 2021-005
    Material Weakness
  • 971514 2021-006
    Significant Deficiency
  • 971515 2021-007
    Significant Deficiency
  • 971516 2021-008
    Significant Deficiency
  • 971517 2021-009
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $230,447
14.879 Mainstream Vouchers $152,297
14.871 Section 8 Housing Choice Vouchers $64,219
14.850 Public and Indian Housing $62,632