Audit 32324

FY End
2022-06-30
Total Expended
$5.62M
Findings
8
Programs
2
Year: 2022 Accepted: 2023-01-03

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
31182 2022-001 Material Weakness Yes P
31237 2022-003 Material Weakness - P
31238 2022-001 Material Weakness - P
31239 2022-003 - - P
607624 2022-001 Material Weakness Yes P
607679 2022-003 Material Weakness - P
607680 2022-001 Material Weakness - P
607681 2022-003 - - P

Contacts

Name Title Type
NVUVKDMLSNC5 Jeff Cottingham Auditee
3096732252 Dawn Carlson Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balance Accounting Policies: Basis of Accounting. The accompanying schedule of expenditures of federal awards is prepared on the accrual basis of accounting. Nonmonetary Assistance at the beginning of the year, the mortgage note payable was $4,663,267. No payments were made during the current year, so the ending mortgage note payable is $4,663,267 to P/R Mortgage & Investment Corp., is guaranteed by the U.S. Department of Housing and Urban Development. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. MORTGAGE INSURANCE FOR THE PURCHASE OF REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS (14.155) - Balances outstanding at the end of the audit period were 4520617.
Title: ADDITIONAL INFORMATION Accounting Policies: Basis of Accounting. The accompanying schedule of expenditures of federal awards is prepared on the accrual basis of accounting. Nonmonetary Assistance at the beginning of the year, the mortgage note payable was $4,663,267. No payments were made during the current year, so the ending mortgage note payable is $4,663,267 to P/R Mortgage & Investment Corp., is guaranteed by the U.S. Department of Housing and Urban Development. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Corporation did not receive any federal awards in the form of noncash assistance forinsurance in effect during the year. In addition, the Project did not pass through any federal grants to subrecipients.

Finding Details

Type of Finding: Material Weakness in Internal Control over Compliance. Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. This condition is inherent in operations which, for sound economic conditions, must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria or Specific Requirement: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented if possible. Cause: There are a small number of personnel to whom to allocate responsibilities in accounting functions. Effect: A lack of segregation of duties increase the risk that errors may occur and not be prevented or detected on a timely basis. Repeat Finding: Yes, Prior year finding 2021-001.
Type of Finding: Other Matters Criteria or Specific Requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $3540 per month from July 2021 through August 2021 and a deposit of $3,618 for September 2021 through June 2022. Condition: The Corporation did not deposit the required amounts into the reserve for replacements for each month during the year ended June 30, 2022. Questioned Costs: None Context: The Corporation had a $779 deficiency in the reserve from replacements from fiscal year 2022. The Corporation made up for the prior year deficiency, however, it did not deposit the required current year amounts into the reserve for replacements for each month during the year ended June 30, 2022. Repeat Finding: No.
Type of Finding: Material Weakness in Internal Control over Compliance. Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. This condition is inherent in operations which, for sound economic conditions, must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria or Specific Requirement: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented if possible. Cause: There are a small number of personnel to whom to allocate responsibilities in accounting functions. Effect: A lack of segregation of duties increase the risk that errors may occur and not be prevented or detected on a timely basis. Repeat Finding: Yes, Prior year finding 2021-001.
Type of Finding: Other Matters Criteria or Specific Requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $3540 per month from July 2021 through August 2021 and a deposit of $3,618 for September 2021 through June 2022. Condition: The Corporation did not deposit the required amounts into the reserve for replacements for each month during the year ended June 30, 2022. Questioned Costs: None Context: The Corporation had a $779 deficiency in the reserve from replacements from fiscal year 2022. The Corporation made up for the prior year deficiency, however, it did not deposit the required current year amounts into the reserve for replacements for each month during the year ended June 30, 2022. Repeat Finding: No.
Type of Finding: Material Weakness in Internal Control over Compliance. Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. This condition is inherent in operations which, for sound economic conditions, must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria or Specific Requirement: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented if possible. Cause: There are a small number of personnel to whom to allocate responsibilities in accounting functions. Effect: A lack of segregation of duties increase the risk that errors may occur and not be prevented or detected on a timely basis. Repeat Finding: Yes, Prior year finding 2021-001.
Type of Finding: Other Matters Criteria or Specific Requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $3540 per month from July 2021 through August 2021 and a deposit of $3,618 for September 2021 through June 2022. Condition: The Corporation did not deposit the required amounts into the reserve for replacements for each month during the year ended June 30, 2022. Questioned Costs: None Context: The Corporation had a $779 deficiency in the reserve from replacements from fiscal year 2022. The Corporation made up for the prior year deficiency, however, it did not deposit the required current year amounts into the reserve for replacements for each month during the year ended June 30, 2022. Repeat Finding: No.
Type of Finding: Material Weakness in Internal Control over Compliance. Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. This condition is inherent in operations which, for sound economic conditions, must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria or Specific Requirement: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented if possible. Cause: There are a small number of personnel to whom to allocate responsibilities in accounting functions. Effect: A lack of segregation of duties increase the risk that errors may occur and not be prevented or detected on a timely basis. Repeat Finding: Yes, Prior year finding 2021-001.
Type of Finding: Other Matters Criteria or Specific Requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $3540 per month from July 2021 through August 2021 and a deposit of $3,618 for September 2021 through June 2022. Condition: The Corporation did not deposit the required amounts into the reserve for replacements for each month during the year ended June 30, 2022. Questioned Costs: None Context: The Corporation had a $779 deficiency in the reserve from replacements from fiscal year 2022. The Corporation made up for the prior year deficiency, however, it did not deposit the required current year amounts into the reserve for replacements for each month during the year ended June 30, 2022. Repeat Finding: No.