Audit 310038

Finding 2023-001: Internal Control over Cash Receipts Condition: The Organization hired a property management company to perform property management functions. Tenant rent payments were misappropriated by an outside contractor hired by the property management company. Criteria: The Organization and management company are responsible for designing, maintaining and implementing internal controls over cash receipts, including employee and contractor supervision and segregation of duties, in order to properly record and track tenant revenue and receivables. Effect: Internal controls over cash receipts did not properly prevent or identify the misappropriation of tenant rent payments processed by the management company Cause: The Organization had an oversight in internal controls set in place to prevent the misappropriation of cash receipts by staff members, contractors and the management company to identify when misappropriation had occurred. Recommendation: The Organization should design internal controls to properly secure custody of cash receipts, and subsequent application to and reconciliation of tenant ledgers. The property management company should implement the internal controls designed by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management is in agreement with the Auditor’s findings. Management has hired additional personnel and implemented stricter internal controls to prevent similar thefts from recurring in the future, and has conducted a site visit to confirm that the controls have been implemented and are functioning correctly.

Finding 2023-001: Internal Control over Cash Receipts Condition: The Organization hired a property management company to perform property management functions. Tenant rent payments were misappropriated by an outside contractor hired by the property management company. Criteria: The Organization and management company are responsible for designing, maintaining and implementing internal controls over cash receipts, including employee and contractor supervision and segregation of duties, in order to properly record and track tenant revenue and receivables. Effect: Internal controls over cash receipts did not properly prevent or identify the misappropriation of tenant rent payments processed by the management company Cause: The Organization had an oversight in internal controls set in place to prevent the misappropriation of cash receipts by staff members, contractors and the management company to identify when misappropriation had occurred. Recommendation: The Organization should design internal controls to properly secure custody of cash receipts, and subsequent application to and reconciliation of tenant ledgers. The property management company should implement the internal controls designed by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management is in agreement with the Auditor’s findings. Management has hired additional personnel and implemented stricter internal controls to prevent similar thefts from recurring in the future, and has conducted a site visit to confirm that the controls have been implemented and are functioning correctly.