Finding No. 2024-001: Financial Reporting (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Reporting
Statement of condition
The lack of appropriate policies, procedures, and internal processes led to inaccurate recording of depreciation, interest, and security deposits, and late filing of required reporting.
Certain information technology controls and procedures were not documented, properly designed, or followed appropriately, including, but not limited to: segregation of administrative user roles from the accounting function, user access review, removal of terminated users, complementary user entity controls assessment, backup restoration testing, penetration testing, and cybersecurity awareness training.
Criteria
The Organization is required to have internal controls and procedures in place in order to timely and accurately report the results of its operations, close its books, and timely file its reports with the applicable federal agencies. These procedures include documenting of levels of review, reconciling accounting records at month-end and year-end close, and maintaining a well-documented, designed, and applied information technology environment.
Cause
Management did not have sufficient internal controls in place to accurately and timely report the results of the Organization's operations and maintenance and maintain the information technology environment.
Effect
Insufficient controls, late closing and reconciliation of accounting records, and insufficiently maintained information technology environment could result in accounting errors and theft. A lack of controls over financial reporting can result in untimely filing of required reports or incomplete filings with the regulatory and oversight entities.
Recommendation
We recommend that management re-evaluate its policies and procedures to ensure an appropriate member of management is in place to review the year-end and month-end close processes, as well as journal entries, reconciliations, and other accounting records. Management should appoint an individual to be responsible for the Organization's financial statements and reporting obligations. Management should evaluate its controls and procedures over the information technology environment to ensure they are properly documented, designed, and followed, including but not limited to: ensuring segregation of administrative user roles from the accounting function, performing a regular review of user access, ensuring terminated users are removed from all systems and software, performing an assessment of complementary user entity controls for relevant software vendors, performing backup restoration tests and penetration tests, and providing cybersecurity awareness training.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-002.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-002: Cash Disbursements and Classification (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Allowable costs, Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, the Organization:
did not properly classify certain expenditures between expense accounts;
did not properly cut off disbursements at fiscal year end, resulting in expenses not being recorded within the current audit period; and
recorded expenses in the current audit period that apply to future periods.
Criteria
Management must review invoices after fiscal year end to ensure all expenses related to the fiscal period are being accurately captured. Additionally, management should review expenditures for accurate expense account classification and review revenue classifications to the appropriate revenue account recording to ensure proper financial and HUD reporting.
Cause
Review procedures were not sufficient to ensure expenditures were recorded in accurate expense accounts and that revenue was recorded in the appropriate revenue account. Review procedures were not adequately followed to review subsequent invoices for relevance to the current fiscal period.
Effect
Certain utility expenses presented for the current fiscal year relate to the prior fiscal year, resulting in overstated expenses. Certain vendor bills related to both the current and next fiscal year were recorded as expense in the current fiscal yar, resulting in overstated expenses. Additionally, inaccurate expense classifications could result in improper financial and HUD reporting.
Recommendation
Management should revisit and enhance its internal controls and procedures over expenditures to ensure expenses are captured in the correct fiscal period. Management should implement an additional period-end review to ensure proper classification of expenses.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-003.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-003: Timely Work Order Completion (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, management was unable to provide supporting documentation regarding timely completion of 54 of 120 work orders selected.
Criteria
HUD projects are required to complete work orders timely.
Cause
The Organization did not have sufficient controls in place to ensure the timely completion of work orders as required by HUD.
Effect
Significant repairs could be delayed and repairs could be falsified or duplicated.
Recommendation
Management should continue to review and enhance its internal controls and procedures over work orders to ensure they are completed on a timely basis.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-004.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-001: Financial Reporting (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Reporting
Statement of condition
The lack of appropriate policies, procedures, and internal processes led to inaccurate recording of depreciation, interest, and security deposits, and late filing of required reporting.
Certain information technology controls and procedures were not documented, properly designed, or followed appropriately, including, but not limited to: segregation of administrative user roles from the accounting function, user access review, removal of terminated users, complementary user entity controls assessment, backup restoration testing, penetration testing, and cybersecurity awareness training.
Criteria
The Organization is required to have internal controls and procedures in place in order to timely and accurately report the results of its operations, close its books, and timely file its reports with the applicable federal agencies. These procedures include documenting of levels of review, reconciling accounting records at month-end and year-end close, and maintaining a well-documented, designed, and applied information technology environment.
Cause
Management did not have sufficient internal controls in place to accurately and timely report the results of the Organization's operations and maintenance and maintain the information technology environment.
Effect
Insufficient controls, late closing and reconciliation of accounting records, and insufficiently maintained information technology environment could result in accounting errors and theft. A lack of controls over financial reporting can result in untimely filing of required reports or incomplete filings with the regulatory and oversight entities.
Recommendation
We recommend that management re-evaluate its policies and procedures to ensure an appropriate member of management is in place to review the year-end and month-end close processes, as well as journal entries, reconciliations, and other accounting records. Management should appoint an individual to be responsible for the Organization's financial statements and reporting obligations. Management should evaluate its controls and procedures over the information technology environment to ensure they are properly documented, designed, and followed, including but not limited to: ensuring segregation of administrative user roles from the accounting function, performing a regular review of user access, ensuring terminated users are removed from all systems and software, performing an assessment of complementary user entity controls for relevant software vendors, performing backup restoration tests and penetration tests, and providing cybersecurity awareness training.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-002.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-002: Cash Disbursements and Classification (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Allowable costs, Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, the Organization:
did not properly classify certain expenditures between expense accounts;
did not properly cut off disbursements at fiscal year end, resulting in expenses not being recorded within the current audit period; and
recorded expenses in the current audit period that apply to future periods.
Criteria
Management must review invoices after fiscal year end to ensure all expenses related to the fiscal period are being accurately captured. Additionally, management should review expenditures for accurate expense account classification and review revenue classifications to the appropriate revenue account recording to ensure proper financial and HUD reporting.
Cause
Review procedures were not sufficient to ensure expenditures were recorded in accurate expense accounts and that revenue was recorded in the appropriate revenue account. Review procedures were not adequately followed to review subsequent invoices for relevance to the current fiscal period.
Effect
Certain utility expenses presented for the current fiscal year relate to the prior fiscal year, resulting in overstated expenses. Certain vendor bills related to both the current and next fiscal year were recorded as expense in the current fiscal yar, resulting in overstated expenses. Additionally, inaccurate expense classifications could result in improper financial and HUD reporting.
Recommendation
Management should revisit and enhance its internal controls and procedures over expenditures to ensure expenses are captured in the correct fiscal period. Management should implement an additional period-end review to ensure proper classification of expenses.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-003.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-003: Timely Work Order Completion (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, management was unable to provide supporting documentation regarding timely completion of 54 of 120 work orders selected.
Criteria
HUD projects are required to complete work orders timely.
Cause
The Organization did not have sufficient controls in place to ensure the timely completion of work orders as required by HUD.
Effect
Significant repairs could be delayed and repairs could be falsified or duplicated.
Recommendation
Management should continue to review and enhance its internal controls and procedures over work orders to ensure they are completed on a timely basis.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-004.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-001: Financial Reporting (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Reporting
Statement of condition
The lack of appropriate policies, procedures, and internal processes led to inaccurate recording of depreciation, interest, and security deposits, and late filing of required reporting.
Certain information technology controls and procedures were not documented, properly designed, or followed appropriately, including, but not limited to: segregation of administrative user roles from the accounting function, user access review, removal of terminated users, complementary user entity controls assessment, backup restoration testing, penetration testing, and cybersecurity awareness training.
Criteria
The Organization is required to have internal controls and procedures in place in order to timely and accurately report the results of its operations, close its books, and timely file its reports with the applicable federal agencies. These procedures include documenting of levels of review, reconciling accounting records at month-end and year-end close, and maintaining a well-documented, designed, and applied information technology environment.
Cause
Management did not have sufficient internal controls in place to accurately and timely report the results of the Organization's operations and maintenance and maintain the information technology environment.
Effect
Insufficient controls, late closing and reconciliation of accounting records, and insufficiently maintained information technology environment could result in accounting errors and theft. A lack of controls over financial reporting can result in untimely filing of required reports or incomplete filings with the regulatory and oversight entities.
Recommendation
We recommend that management re-evaluate its policies and procedures to ensure an appropriate member of management is in place to review the year-end and month-end close processes, as well as journal entries, reconciliations, and other accounting records. Management should appoint an individual to be responsible for the Organization's financial statements and reporting obligations. Management should evaluate its controls and procedures over the information technology environment to ensure they are properly documented, designed, and followed, including but not limited to: ensuring segregation of administrative user roles from the accounting function, performing a regular review of user access, ensuring terminated users are removed from all systems and software, performing an assessment of complementary user entity controls for relevant software vendors, performing backup restoration tests and penetration tests, and providing cybersecurity awareness training.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-002.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-002: Cash Disbursements and Classification (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Allowable costs, Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, the Organization:
did not properly classify certain expenditures between expense accounts;
did not properly cut off disbursements at fiscal year end, resulting in expenses not being recorded within the current audit period; and
recorded expenses in the current audit period that apply to future periods.
Criteria
Management must review invoices after fiscal year end to ensure all expenses related to the fiscal period are being accurately captured. Additionally, management should review expenditures for accurate expense account classification and review revenue classifications to the appropriate revenue account recording to ensure proper financial and HUD reporting.
Cause
Review procedures were not sufficient to ensure expenditures were recorded in accurate expense accounts and that revenue was recorded in the appropriate revenue account. Review procedures were not adequately followed to review subsequent invoices for relevance to the current fiscal period.
Effect
Certain utility expenses presented for the current fiscal year relate to the prior fiscal year, resulting in overstated expenses. Certain vendor bills related to both the current and next fiscal year were recorded as expense in the current fiscal yar, resulting in overstated expenses. Additionally, inaccurate expense classifications could result in improper financial and HUD reporting.
Recommendation
Management should revisit and enhance its internal controls and procedures over expenditures to ensure expenses are captured in the correct fiscal period. Management should implement an additional period-end review to ensure proper classification of expenses.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-003.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-003: Timely Work Order Completion (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, management was unable to provide supporting documentation regarding timely completion of 54 of 120 work orders selected.
Criteria
HUD projects are required to complete work orders timely.
Cause
The Organization did not have sufficient controls in place to ensure the timely completion of work orders as required by HUD.
Effect
Significant repairs could be delayed and repairs could be falsified or duplicated.
Recommendation
Management should continue to review and enhance its internal controls and procedures over work orders to ensure they are completed on a timely basis.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-004.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-001: Financial Reporting (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Reporting
Statement of condition
The lack of appropriate policies, procedures, and internal processes led to inaccurate recording of depreciation, interest, and security deposits, and late filing of required reporting.
Certain information technology controls and procedures were not documented, properly designed, or followed appropriately, including, but not limited to: segregation of administrative user roles from the accounting function, user access review, removal of terminated users, complementary user entity controls assessment, backup restoration testing, penetration testing, and cybersecurity awareness training.
Criteria
The Organization is required to have internal controls and procedures in place in order to timely and accurately report the results of its operations, close its books, and timely file its reports with the applicable federal agencies. These procedures include documenting of levels of review, reconciling accounting records at month-end and year-end close, and maintaining a well-documented, designed, and applied information technology environment.
Cause
Management did not have sufficient internal controls in place to accurately and timely report the results of the Organization's operations and maintenance and maintain the information technology environment.
Effect
Insufficient controls, late closing and reconciliation of accounting records, and insufficiently maintained information technology environment could result in accounting errors and theft. A lack of controls over financial reporting can result in untimely filing of required reports or incomplete filings with the regulatory and oversight entities.
Recommendation
We recommend that management re-evaluate its policies and procedures to ensure an appropriate member of management is in place to review the year-end and month-end close processes, as well as journal entries, reconciliations, and other accounting records. Management should appoint an individual to be responsible for the Organization's financial statements and reporting obligations. Management should evaluate its controls and procedures over the information technology environment to ensure they are properly documented, designed, and followed, including but not limited to: ensuring segregation of administrative user roles from the accounting function, performing a regular review of user access, ensuring terminated users are removed from all systems and software, performing an assessment of complementary user entity controls for relevant software vendors, performing backup restoration tests and penetration tests, and providing cybersecurity awareness training.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-002.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-002: Cash Disbursements and Classification (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Allowable costs, Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, the Organization:
did not properly classify certain expenditures between expense accounts;
did not properly cut off disbursements at fiscal year end, resulting in expenses not being recorded within the current audit period; and
recorded expenses in the current audit period that apply to future periods.
Criteria
Management must review invoices after fiscal year end to ensure all expenses related to the fiscal period are being accurately captured. Additionally, management should review expenditures for accurate expense account classification and review revenue classifications to the appropriate revenue account recording to ensure proper financial and HUD reporting.
Cause
Review procedures were not sufficient to ensure expenditures were recorded in accurate expense accounts and that revenue was recorded in the appropriate revenue account. Review procedures were not adequately followed to review subsequent invoices for relevance to the current fiscal period.
Effect
Certain utility expenses presented for the current fiscal year relate to the prior fiscal year, resulting in overstated expenses. Certain vendor bills related to both the current and next fiscal year were recorded as expense in the current fiscal yar, resulting in overstated expenses. Additionally, inaccurate expense classifications could result in improper financial and HUD reporting.
Recommendation
Management should revisit and enhance its internal controls and procedures over expenditures to ensure expenses are captured in the correct fiscal period. Management should implement an additional period-end review to ensure proper classification of expenses.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-003.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process
Finding No. 2024-003: Timely Work Order Completion (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Supportive Housing for Persons with Disabilities (Section 811)
Federal Assistance Listing Number: 14.181
Compliance Requirement: Activities allowed or unallowed
Statement of condition
During the year ended June 30, 2024, management was unable to provide supporting documentation regarding timely completion of 54 of 120 work orders selected.
Criteria
HUD projects are required to complete work orders timely.
Cause
The Organization did not have sufficient controls in place to ensure the timely completion of work orders as required by HUD.
Effect
Significant repairs could be delayed and repairs could be falsified or duplicated.
Recommendation
Management should continue to review and enhance its internal controls and procedures over work orders to ensure they are completed on a timely basis.
Identification of repeat finding
The finding is a repeat of Finding No. 2023-004.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process