Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: All disbursements from the regular operating account must be supported by approved invoices, bills, or other supporting documentation.
Condition: The Organization did not have a formal policy for invoice approval prior to payment for part of the fiscal year.
Questioned Costs: None
Context: During our audit, we noted that the Organization did not consistently approve invoices prior to payment. 10 of 40 disbursements tested did not have proper invoice approvals.
Cause: The entity has a small finance department.
Effect: Failure to approve invoices prior to payment increases the risk of unauthorized, inaccurate, or fraudulent payments. This could lead to financial misstatements and non-compliance with applicable regulations.
Recommendation: CLA recommends the organization develops and enforces a policy requiring the
approval of all invoices before payment.
Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Starting in April 2024, Webster began implementing Silverstone Living’s invoice approval policy. The authorized signers for invoices are the Executive Director, the CFO, and the department heads.
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Other Matters
Criteria or specific requirement: Bank statements shall be reconciled promptly to the formal accounting records by persons other than those recording or handling cash or preparing and signing checks.
Condition: There was a lack of segregation of duties surrounding cash management for part of the
fiscal year.
Questioned Costs: None
Context: During our audit, we noted that bank reconciliations were prepared promptly, however, there was a lack of segregation of duties surrounding review by an independent person. 1 of 3 bank reconciliations tested were not reviewed by someone other than the preparer. It was noted that Webster did not have a formal bank reconciliation review policy in place from September through November 2023.
Cause: The entity has a small finance department.
Effect: Failure to have bank reconciliations reviewed by an independent person increases the risk of errors, omissions, or fraudulent activities going undetected. This could lead to financial misstatements and non-compliance with applicable regulations.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001.
Recommendation: CLA recommends the organization develops and enforces a policy requiring the independent approval of all bank reconciliations on a monthly basis.
Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Beginning in December 2023, Webster began implementing Silverstone Living’s policy regarding bank reconciliation preparation and approval. Bank reconciliations are prepared on a monthly basis by the Business Office Manager or the Assistant Controller and reviewed by the CFO.
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Other Matters
Criteria or specific requirement: According to HUD regulations, REAC reports must be submitted within 90 days of year-end.
Condition: Rannie Webster Foundation did not complete the REAC submission within 90 days of the August 31, 2023 year-end.
Questioned Costs: None
Context: Rannie Webster Foundation did not complete the REAC submission within 90 days of the August 31, 2023 year end. Management did, however, request an extension from HUD.
Cause: The late submission of the HUD REAC report is due to the affiliation with Silverstone Living, effective May 1, 2023. As a result of the affiliation, there was a transition of management, which caused reporting delays.
Effect: Late submissions can result in non-compliance with HUD regulations, which may lead to further administrative actions or scrutiny.
Recommendation: We recommend that the organization implement measures to ensure timely submission of HUD REAC reports.
Views of responsible officials: Management is in agreement with the finding. The reason for the late fiscal year 2023 submission was due to the affiliation with Silverstone and management transition. Management communicated these circumstances with HUD and submitted a request for extension prior to the deadline. Management plans to submit the fiscal year 2024 REAC within the 90-day deadline.
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: All disbursements from the regular operating account must be supported by approved invoices, bills, or other supporting documentation.
Condition: The Organization did not have a formal policy for invoice approval prior to payment for part of the fiscal year.
Questioned Costs: None
Context: During our audit, we noted that the Organization did not consistently approve invoices prior to payment. 10 of 40 disbursements tested did not have proper invoice approvals.
Cause: The entity has a small finance department.
Effect: Failure to approve invoices prior to payment increases the risk of unauthorized, inaccurate, or fraudulent payments. This could lead to financial misstatements and non-compliance with applicable regulations.
Recommendation: CLA recommends the organization develops and enforces a policy requiring the
approval of all invoices before payment.
Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Starting in April 2024, Webster began implementing Silverstone Living’s invoice approval policy. The authorized signers for invoices are the Executive Director, the CFO, and the department heads.
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Other Matters
Criteria or specific requirement: Bank statements shall be reconciled promptly to the formal accounting records by persons other than those recording or handling cash or preparing and signing checks.
Condition: There was a lack of segregation of duties surrounding cash management for part of the
fiscal year.
Questioned Costs: None
Context: During our audit, we noted that bank reconciliations were prepared promptly, however, there was a lack of segregation of duties surrounding review by an independent person. 1 of 3 bank reconciliations tested were not reviewed by someone other than the preparer. It was noted that Webster did not have a formal bank reconciliation review policy in place from September through November 2023.
Cause: The entity has a small finance department.
Effect: Failure to have bank reconciliations reviewed by an independent person increases the risk of errors, omissions, or fraudulent activities going undetected. This could lead to financial misstatements and non-compliance with applicable regulations.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001.
Recommendation: CLA recommends the organization develops and enforces a policy requiring the independent approval of all bank reconciliations on a monthly basis.
Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Beginning in December 2023, Webster began implementing Silverstone Living’s policy regarding bank reconciliation preparation and approval. Bank reconciliations are prepared on a monthly basis by the Business Office Manager or the Assistant Controller and reviewed by the CFO.
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Other Matters
Criteria or specific requirement: According to HUD regulations, REAC reports must be submitted within 90 days of year-end.
Condition: Rannie Webster Foundation did not complete the REAC submission within 90 days of the August 31, 2023 year-end.
Questioned Costs: None
Context: Rannie Webster Foundation did not complete the REAC submission within 90 days of the August 31, 2023 year end. Management did, however, request an extension from HUD.
Cause: The late submission of the HUD REAC report is due to the affiliation with Silverstone Living, effective May 1, 2023. As a result of the affiliation, there was a transition of management, which caused reporting delays.
Effect: Late submissions can result in non-compliance with HUD regulations, which may lead to further administrative actions or scrutiny.
Recommendation: We recommend that the organization implement measures to ensure timely submission of HUD REAC reports.
Views of responsible officials: Management is in agreement with the finding. The reason for the late fiscal year 2023 submission was due to the affiliation with Silverstone and management transition. Management communicated these circumstances with HUD and submitted a request for extension prior to the deadline. Management plans to submit the fiscal year 2024 REAC within the 90-day deadline.