Audit 1908

Criteria: Generally, a system of internal control contemplates segregation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transactions. Condition: Due to the limited size of the Cooperative’s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper segregation of duties at this time. Effect: The Cooperative is unable to maintain segregation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: This finding was reported in the prior year as finding 2022-001. Recommendation: We recommend that the Cooperative continue to segregate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2022-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.

Criteria: The Cooperative is required to annually submit an audit electronically to the Federal Audit Clearinghouse within nine months of the Cooperative’s fiscal year-end. Condition: The Cooperative has not timely filed the annual audit with the Federal Audit Clearinghouse. Questioned Costs: None. Context: The Cooperative did not timely file the annual audit with the Federal Audit Clearinghouse. Effect: The Cooperative is out of compliance with their HUD regulatory agreement. Cause: The Cooperative had delays in obtaining a Unique Entity ID so was unable to timely file the annual audit with the Federal Audit Clearinghouse. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative file their annual audit with the Federal Audit Clearinghouse within nine months of their fiscal year-end. Current Status: Resolved, the Cooperative’s fiscal year-end 2022 audit was filed with the Federal Audit Clearinghouse. Action Taken: The Cooperative will timely file their annual audit with the Federal Audit Clearinghouse. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.

Criteria: Generally, a system of internal control contemplates segregation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transactions. Condition: Due to the limited size of the Cooperative’s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper segregation of duties at this time. Effect: The Cooperative is unable to maintain segregation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: This finding was reported in the prior year as finding 2022-001. Recommendation: We recommend that the Cooperative continue to segregate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2022-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.

Criteria: The Cooperative is required to annually submit an audit electronically to the Federal Audit Clearinghouse within nine months of the Cooperative’s fiscal year-end. Condition: The Cooperative has not timely filed the annual audit with the Federal Audit Clearinghouse. Questioned Costs: None. Context: The Cooperative did not timely file the annual audit with the Federal Audit Clearinghouse. Effect: The Cooperative is out of compliance with their HUD regulatory agreement. Cause: The Cooperative had delays in obtaining a Unique Entity ID so was unable to timely file the annual audit with the Federal Audit Clearinghouse. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative file their annual audit with the Federal Audit Clearinghouse within nine months of their fiscal year-end. Current Status: Resolved, the Cooperative’s fiscal year-end 2022 audit was filed with the Federal Audit Clearinghouse. Action Taken: The Cooperative will timely file their annual audit with the Federal Audit Clearinghouse. Views of responsible officials and planned corrective actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 29-30 in this audit report.