Finding 2022-001 Segregation of Duties Condition: The Corporation?s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.
Finding 2022-002 Condition: The Corporation reported vacancies to the USDA even though there were tenants that occupied those rooms. Criteria: The Corporation should properly report tenant information to the USDA. Cause: The Corporation does not have an internal control system designed to ensure that vacancies are appropriately documented and maintained. Effect: Lack of internal controls over vacancy reporting resulted in a loss of revenue of approximately $1,818. Management fees are to be calculated using the number of occupied rooms. Due to the incorrect vacancies, management fees may not have been calculated correctly. Recommendation: We recommend the Corporation create policies and procedures to ensure that all tenants are accurately reported to the USDA. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-003 Tenant File Documentation Condition: One tenant did not have a signature for the tenant certification and one tenant did not have a rental agreement in the file. Criteria: The Corporation should ensure that tenant files are complete with all documentation and signatures. Cause: The Corporation?s previous property manager did not have a system in place to verify tenant files were up to date. Effect: This deficiency did not have an effect on the tenant rent. Recommendation: We recommend the Corporation create a checklist to ensure that tenant files are properly documented. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-004 Condition: Form 3560-12 was not filled out for a transfer that was made from the reserve funds. Bank fees have also been paid out of the reserve funds and Form 3560-12 was not filled out. The required annual payments have not been made to the reserve funds. Criteria: The Corporation is required to fill out Form 3560-12 to obtain approval for withdrawals from the reserve funds. The Corporation is required to make annual payments to the reserve funds until the funds reach a minimum dollar amount. Cause: The Corporation?s previous property manager did not have the proper forms on file for all disbursements made from the reserve funds. The previous property manager did not have a system in place to make the required annual payments to the reserve funds. Effect: Lack of documentation of reserve withdrawals and not funding the reserve funds could adversely affect the Corporation?s compliance with the USDA-Rural Development regulations. Recommendation: We recommend the Corporation fill out Form 3560-12 each time distributions are to be made from the reserve funds and validate the forms to match the invoices that were paid. We also recommend that the Corporation discuss with the USDA the required minimum amounts in the reserve funds and determine what the annual payments should be for each apartment building. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-001 Segregation of Duties Condition: The Corporation?s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.
Finding 2022-002 Condition: The Corporation reported vacancies to the USDA even though there were tenants that occupied those rooms. Criteria: The Corporation should properly report tenant information to the USDA. Cause: The Corporation does not have an internal control system designed to ensure that vacancies are appropriately documented and maintained. Effect: Lack of internal controls over vacancy reporting resulted in a loss of revenue of approximately $1,818. Management fees are to be calculated using the number of occupied rooms. Due to the incorrect vacancies, management fees may not have been calculated correctly. Recommendation: We recommend the Corporation create policies and procedures to ensure that all tenants are accurately reported to the USDA. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-003 Tenant File Documentation Condition: One tenant did not have a signature for the tenant certification and one tenant did not have a rental agreement in the file. Criteria: The Corporation should ensure that tenant files are complete with all documentation and signatures. Cause: The Corporation?s previous property manager did not have a system in place to verify tenant files were up to date. Effect: This deficiency did not have an effect on the tenant rent. Recommendation: We recommend the Corporation create a checklist to ensure that tenant files are properly documented. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-004 Condition: Form 3560-12 was not filled out for a transfer that was made from the reserve funds. Bank fees have also been paid out of the reserve funds and Form 3560-12 was not filled out. The required annual payments have not been made to the reserve funds. Criteria: The Corporation is required to fill out Form 3560-12 to obtain approval for withdrawals from the reserve funds. The Corporation is required to make annual payments to the reserve funds until the funds reach a minimum dollar amount. Cause: The Corporation?s previous property manager did not have the proper forms on file for all disbursements made from the reserve funds. The previous property manager did not have a system in place to make the required annual payments to the reserve funds. Effect: Lack of documentation of reserve withdrawals and not funding the reserve funds could adversely affect the Corporation?s compliance with the USDA-Rural Development regulations. Recommendation: We recommend the Corporation fill out Form 3560-12 each time distributions are to be made from the reserve funds and validate the forms to match the invoices that were paid. We also recommend that the Corporation discuss with the USDA the required minimum amounts in the reserve funds and determine what the annual payments should be for each apartment building. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-001 Segregation of Duties Condition: The Corporation?s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.
Finding 2022-002 Condition: The Corporation reported vacancies to the USDA even though there were tenants that occupied those rooms. Criteria: The Corporation should properly report tenant information to the USDA. Cause: The Corporation does not have an internal control system designed to ensure that vacancies are appropriately documented and maintained. Effect: Lack of internal controls over vacancy reporting resulted in a loss of revenue of approximately $1,818. Management fees are to be calculated using the number of occupied rooms. Due to the incorrect vacancies, management fees may not have been calculated correctly. Recommendation: We recommend the Corporation create policies and procedures to ensure that all tenants are accurately reported to the USDA. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-003 Tenant File Documentation Condition: One tenant did not have a signature for the tenant certification and one tenant did not have a rental agreement in the file. Criteria: The Corporation should ensure that tenant files are complete with all documentation and signatures. Cause: The Corporation?s previous property manager did not have a system in place to verify tenant files were up to date. Effect: This deficiency did not have an effect on the tenant rent. Recommendation: We recommend the Corporation create a checklist to ensure that tenant files are properly documented. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-004 Condition: Form 3560-12 was not filled out for a transfer that was made from the reserve funds. Bank fees have also been paid out of the reserve funds and Form 3560-12 was not filled out. The required annual payments have not been made to the reserve funds. Criteria: The Corporation is required to fill out Form 3560-12 to obtain approval for withdrawals from the reserve funds. The Corporation is required to make annual payments to the reserve funds until the funds reach a minimum dollar amount. Cause: The Corporation?s previous property manager did not have the proper forms on file for all disbursements made from the reserve funds. The previous property manager did not have a system in place to make the required annual payments to the reserve funds. Effect: Lack of documentation of reserve withdrawals and not funding the reserve funds could adversely affect the Corporation?s compliance with the USDA-Rural Development regulations. Recommendation: We recommend the Corporation fill out Form 3560-12 each time distributions are to be made from the reserve funds and validate the forms to match the invoices that were paid. We also recommend that the Corporation discuss with the USDA the required minimum amounts in the reserve funds and determine what the annual payments should be for each apartment building. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-001 Segregation of Duties Condition: The Corporation?s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.
Finding 2022-002 Condition: The Corporation reported vacancies to the USDA even though there were tenants that occupied those rooms. Criteria: The Corporation should properly report tenant information to the USDA. Cause: The Corporation does not have an internal control system designed to ensure that vacancies are appropriately documented and maintained. Effect: Lack of internal controls over vacancy reporting resulted in a loss of revenue of approximately $1,818. Management fees are to be calculated using the number of occupied rooms. Due to the incorrect vacancies, management fees may not have been calculated correctly. Recommendation: We recommend the Corporation create policies and procedures to ensure that all tenants are accurately reported to the USDA. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-003 Tenant File Documentation Condition: One tenant did not have a signature for the tenant certification and one tenant did not have a rental agreement in the file. Criteria: The Corporation should ensure that tenant files are complete with all documentation and signatures. Cause: The Corporation?s previous property manager did not have a system in place to verify tenant files were up to date. Effect: This deficiency did not have an effect on the tenant rent. Recommendation: We recommend the Corporation create a checklist to ensure that tenant files are properly documented. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.
Finding 2022-004 Condition: Form 3560-12 was not filled out for a transfer that was made from the reserve funds. Bank fees have also been paid out of the reserve funds and Form 3560-12 was not filled out. The required annual payments have not been made to the reserve funds. Criteria: The Corporation is required to fill out Form 3560-12 to obtain approval for withdrawals from the reserve funds. The Corporation is required to make annual payments to the reserve funds until the funds reach a minimum dollar amount. Cause: The Corporation?s previous property manager did not have the proper forms on file for all disbursements made from the reserve funds. The previous property manager did not have a system in place to make the required annual payments to the reserve funds. Effect: Lack of documentation of reserve withdrawals and not funding the reserve funds could adversely affect the Corporation?s compliance with the USDA-Rural Development regulations. Recommendation: We recommend the Corporation fill out Form 3560-12 each time distributions are to be made from the reserve funds and validate the forms to match the invoices that were paid. We also recommend that the Corporation discuss with the USDA the required minimum amounts in the reserve funds and determine what the annual payments should be for each apartment building. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.