Finding Text
Criteria or specific requirement: AU Section 325 indicates that the “failure of controls designed to safeguard assets from loss, damage or misappropriations” should be regarded as a material weakness in internal controls. In order to safeguard assets, the Ford County Housing Authority’s Internal Control Policy requires that all disbursements be appropriately explained and documented. Statements are to be adequately supported by detailed invoices prior to payment. All disbursements except for payroll taxes and loan payments are to be made by check; all checks are to be co-signed by the Executive Director and a Board member.
Condition: Electronic payments of the monthly credit card statements and other vendor payments were noted that did not have all of the required detailed invoices attached to support the charges.
Effect: The electronic payments were not fully supported by the required, detailed invoices. Lack of supporting detail results in expenditures that may not be allowable. Electronic payments of vendor bills and credit cards are not allowed according to the Housing Authority’s internal control policy. A Board member is not signing off on the payment as required.
Cause: The internal controls established are not being followed.
Recommendation: It is recommended that all electronic payments be discontinued in accordance with Housing Authority’s policy. All expenditures must have complete, detailed support attached prior to a check being prepared for payment. Two signatures must be affixed to all checks as the final approval prior to distribution.