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.