Audit 295892

FY End
2023-06-30
Total Expended
$1.23M
Findings
16
Programs
4
Year: 2023 Accepted: 2024-03-19
Auditor: Carlsonsv LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
381164 2023-001 Significant Deficiency Yes P
381165 2023-002 Significant Deficiency - P
381166 2023-001 Significant Deficiency Yes P
381167 2023-002 Significant Deficiency - P
381168 2023-001 Significant Deficiency Yes P
381169 2023-002 Significant Deficiency - P
381170 2023-001 Significant Deficiency Yes P
381171 2023-002 Significant Deficiency - P
957606 2023-001 Significant Deficiency Yes P
957607 2023-002 Significant Deficiency - P
957608 2023-001 Significant Deficiency Yes P
957609 2023-002 Significant Deficiency - P
957610 2023-001 Significant Deficiency Yes P
957611 2023-002 Significant Deficiency - P
957612 2023-001 Significant Deficiency Yes P
957613 2023-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $815,210 Yes 2
14.879 Mainstream Vouchers $201,405 - 2
14.850 Public and Indian Housing $149,065 - 2
14.872 Public Housing Capital Fund $59,750 - 2

Contacts

Name Title Type
KMUJAJW5Q4C3 Mikel Olson Auditee
2187393249 Dean Birkeland Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Housing and Redevelopment Authority of Fergus Falls has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. BASIS OF PRESENTATION - The accompanying schedule of expenditures of federal awards includes the federal award activity of the Housing and Redevelopment Authority of Fergus Falls under programs of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority.

Finding Details

Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.
Inadequate Segregation of Duties: Condition: The Authority has a limited number of office personnel and, accordingly, does not have adequate separation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Criteria: A fundamental concept in a good system of internal controls is the segregation of incompatible duties. Cause: Due to the relatively small size of the Authority’s staff, the Authority is not able to attain ideal segregation of duties of separating the assignment of different people to authorize transactions, record transactions, and maintain custody of assets. Effect: This control deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure so as to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Organization has determined the benefit of adequately segregating duties is less than the cost. Based on the assessment, the Organization is accepting the risk posed by the deficiency while also evaluating mitigating controls that will help reduce the risk of material misstatement of the financial statements. Management attempts to mitigate the associated risks by doing the following: 1. Identifies areas where lack of segregation of duties exists and where there are higher risks of errors or fraud occurring. 2. Implements limited segregation to the extent possible to reduce risks without impairing efficiency. 3. Uses the knowledge that management and the Board of Directors have of operations by having them review certain accounting records and reports. 4. Monitors the effectiveness of the above actions and makes changes as considered appropriate.
Audit Adjustments: Criteria and Condition: Material audit adjustments were necessary for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: The City does not have the resources to prepare all required adjusting entries necessary in preparing financial statements. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with GAAP. Recommendation: The Organization should review internal controls currently in place and improve internal controls over financial reporting which will prevent, or detect and correct, misstatements to the financial statements. View of Responsible Officials: Management of the Organization is in agreement with the finding.