Finding Text
Finding: 2023-003
Program Name: Moving to Work (ALN #14.881)
Federal Awarding Agency: Department of Housing and Urban Development
Compliance Requirement: Special Tests and Provisions
Type of Finding: Material Weakness; Material Noncompliance Qualification
Criteria: The Authority is required to aggregate cost and consumption data from utility invoices for each Operating Fund project. This aggregated data is transferred to form HUD-52722 Calculation of Utilities Expense Level and used to determine the utility portion of the Operating Fund subsidy.
Condition: We selected three projects to test the accuracy of Form HUD-52722 and verify utility invoices supporting utility costs and consumption. The Authority was unable to provide invoices supporting utility consumption and cost for two projects. In addition, water costs were overstated for one project resulting in overstatement of the UEL by $34,200.
Cause: The Authority does not have controls in place to ensure supporting documents are maintained to support all HUD-52722 forms.
Effect: The amounts reported on Form 52722 could not be verified resulting in a potential error in the operating subsidy.
Auditor Recommendation: The Authority should maintain files with all supporting documentation for each HUD-52722.
Questioned Costs: Undeterminable.
Management’s Response: To ensure supporting documents are maintained to support all HUD-52722 forms, all privately managed Mixed-Finance developments will submit utility cost and consumption data to include copies of invoices to LMHA monthly. Utility cost and consumption data to include copies of invoices are already collected by LMHA managed sites.