FAC Explorer

Audit 321330

FY End
2023-12-31
Total Expended
$5.21M
Findings
8
Programs
6
Organization: Housing Initiatives, INC (WI)
Year: 2023 Accepted: 2024-09-26
Auditor: Johnson Block & Company INC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
498587 2023-001 Material Weakness Yes N
498588 2023-001 Material Weakness Yes N
498589 2023-001 Material Weakness Yes N
498590 2023-001 Material Weakness Yes N
1075029 2023-001 Material Weakness Yes N
1075030 2023-001 Material Weakness Yes N
1075031 2023-001 Material Weakness Yes N
1075032 2023-001 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $2.44M Yes 1
14.267 Continuum of Care Program $1.26M Yes 1
14.256 Neighborhood Stabilization Program (recovery Act Funded) $483,996 - 0
14.871 Section 8 Housing Choice Vouchers $218,116 - 0
14.235 Supportive Housing Program $215,700 - 0
14.218 Community Development Block Grants/entitlement Grants $206,751 - 0

Contacts

Name Title Type
MRLMUAJQZKS7 Brad Hinkfuss Auditee
6086201751 Tara Bast Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as a reimbursement. De Minimis Rate Used: N Rate Explanation: Housing Initiatives did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying “Schedule of Expenditures of Federal Awards” (the “Schedule”) includes the federal award activity of Housing Initiatives, Inc. under programs of the federal government of the year ended December 31, 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 Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Housing Initiatives, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Housing Initiatives, Inc.
Title: Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as a reimbursement. De Minimis Rate Used: N Rate Explanation: Housing Initiatives did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Housing Initiatives, Inc. did not pass through any funds to subrecipients.
Title: Loans Outstanding Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as a reimbursement. De Minimis Rate Used: N Rate Explanation: Housing Initiatives did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Housing Initiatives, Inc. has received various loans through the federal loan programs listed below. As required by Uniform Guidance, the Schedule of Expenditures of Federal Awards includes loan balances outstanding at the beginning of the year that are subject to compliance. Over time, certain loans are considered past the Period of Availability (POA) and are no longer subject to federal compliance. The loan balances disclosed below include all loans, including those that may be past the POA. The balance of loans outstanding at December 31, 2023 are: 14.218 Community Development Block Grants/Entitlement Grants $206,751, 14.235 Supportive Housing Program $382,747, 14.239 Home Investment Partnerships Program $3,656,259, 14.256 Neighborhood Stabilization Program $483,996, Continuum of Care Program $95,314

Finding Details

Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.
Finding 2023-001
2023-001 Financial Reporting – Material Adjustments and Report Reclassifications Criteria: Proper financial closing and reconciliation procedures should be in place to identify and adjust the financial records to ensure the financial statements are fairly stated and presented in accordance with applicable standards. These procedures should be followed not only for yearend closing and reporting, but on a routine basis to ensure financial records are accurate through the reporting period. Condition: During audit procedures, the auditors proposed audit adjustments and account reclassification entries that, if not made, would have resulted in the financial statements being materially misstated. Specifically, adjustments were necessary to reconcile federal grant funds received but not accurately reflected in the financial records. Additionally, adjustments were necessary to reconcile the rental revenues between tenant payments and government subsidized rental payments. Cause: Certain adjustments for yearend accruals were not made by management. Additionally, certain reclassification adjustments were not identified that were necessary to present the financial statements accurately in accordance with applicable standards. Internal control processes and procedures do not currently include a review of actual rental payment transactions after the initial transaction is recorded. As a result, when actual rental payment funding sources differ from that of the initial transaction generated from the tenant management system, changes are not being identified or reflected in the financial records. Effect: Housing Initiatives, Inc.’s system of internal control may not prevent, detect, or correct misstatements in the financial statements. Questioned Costs: Not applicable Auditor’s Recommendation: The auditor will continue to work with Housing Initiatives, Inc., providing information and training where needed, to make Housing Initiatives, Inc. personnel more knowledgeable about its responsibility for the financial statements. The auditor recommends that Housing Initiatives, Inc. review the various monthly and year-end processes and transactions necessary to close and reconcile the financial records. Auditee’s Response: Housing Initiatives, Inc. acknowledges its responsibility for the financial statements and proper presentation of such. Housing Initiatives, Inc. has continued to work with internal staff as well as consultants to continually update processes and procedures to ensure that financial activity is properly captured and recorded.