FAC Explorer

Audit 33540

FY End
2022-12-31
Total Expended
$886,700
Findings
8
Programs
2
Organization: Warren County Community Housing Agency, Inc. (IA)
Year: 2022 Accepted: 2023-09-16
Auditor: Denman & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
35842 2022-001 Material Weakness Yes P
35843 2022-002 Significant Deficiency Yes P
35844 2022-001 Material Weakness Yes P
35887 2022-002 Significant Deficiency Yes P
612284 2022-001 Material Weakness Yes P
612285 2022-002 Significant Deficiency Yes P
612286 2022-001 Material Weakness Yes P
612329 2022-002 Significant Deficiency Yes P

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $843,362 Yes 2
10.427 Rural Rental Assistance Payments $43,338 - 2

Contacts

Name Title Type
EN8LSKN584T5 Jessica Howe Auditee
5159611073 Robert Endriss Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: NOTE A BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (schedule) includes the federal award activity of the Agency under programs of the federal government for the year ended December 31, 2022. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Agency, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Agency.NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpendituresExpenditures reported in the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 766602.

Finding Details

Finding 2022-001
Criteria Segregation of duties should be in place to ensure appropriate checks and balances and to mitigate incompatible duties being performed by one individual over key financial and compliance functions. Condition The Agency does not maintain sufficient segregation of duties to prevent one individual from having control over each of the following areas: 1) Cash receipts ? detailed record keeping, custody, reconciling, and posting to the general ledger. 2) Disbursements ? check preparation, and positing to and maintaining the general ledger. Cause The Agency does not have sufficient staffing to ensure multiple individuals are involved in all significant accounting controls and transaction cycles. Effect One individual may have complete control over certain transactions without adequate checks and balances or reviews being implemented. Recommendation Resolving the deficiency may require the Agency to hire additional personnel necessary to adequately separate accounting responsibilities. This solution may result in a substantial increase in operating costs. The other action would be to accept that by definition there is a material weakness in internal control and the cost of eliminating that material weakness may exceed the benefit.
Finding 2022-002
Criteria To provide for better management of the Agency?s financial position, the Agency should maintain full accrual financial statements throughout the fiscal year, rather than producing full accrual statements only at fiscal year end. Condition The Agency does not prepare its internal financial statements on the full accrual method of accounting, but rather maintains the financial records on the basis of cash receipts and cash disbursements. Cause Agency staff do not possess the training necessary to prepare the Agency?s financial statements in accordance with U.S. GAAP in interim periods. Effect The Agency?s interim financial statements do not include accrual transactions. Recommendation The Agency should investigate opportunities to provide staff additional training in GAAP basis financial reporting.
Finding 2022-001
Criteria Segregation of duties should be in place to ensure appropriate checks and balances and to mitigate incompatible duties being performed by one individual over key financial and compliance functions. Condition The Agency does not maintain sufficient segregation of duties to prevent one individual from having control over each of the following areas: 1) Cash receipts ? detailed record keeping, custody, reconciling, and posting to the general ledger. 2) Disbursements ? check preparation, and positing to and maintaining the general ledger. Cause The Agency does not have sufficient staffing to ensure multiple individuals are involved in all significant accounting controls and transaction cycles. Effect One individual may have complete control over certain transactions without adequate checks and balances or reviews being implemented. Recommendation Resolving the deficiency may require the Agency to hire additional personnel necessary to adequately separate accounting responsibilities. This solution may result in a substantial increase in operating costs. The other action would be to accept that by definition there is a material weakness in internal control and the cost of eliminating that material weakness may exceed the benefit.
Finding 2022-002
Criteria To provide for better management of the Agency?s financial position, the Agency should maintain full accrual financial statements throughout the fiscal year, rather than producing full accrual statements only at fiscal year end. Condition The Agency does not prepare its internal financial statements on the full accrual method of accounting, but rather maintains the financial records on the basis of cash receipts and cash disbursements. Cause Agency staff do not possess the training necessary to prepare the Agency?s financial statements in accordance with U.S. GAAP in interim periods. Effect The Agency?s interim financial statements do not include accrual transactions. Recommendation The Agency should investigate opportunities to provide staff additional training in GAAP basis financial reporting.
Finding 2022-001
Criteria Segregation of duties should be in place to ensure appropriate checks and balances and to mitigate incompatible duties being performed by one individual over key financial and compliance functions. Condition The Agency does not maintain sufficient segregation of duties to prevent one individual from having control over each of the following areas: 1) Cash receipts ? detailed record keeping, custody, reconciling, and posting to the general ledger. 2) Disbursements ? check preparation, and positing to and maintaining the general ledger. Cause The Agency does not have sufficient staffing to ensure multiple individuals are involved in all significant accounting controls and transaction cycles. Effect One individual may have complete control over certain transactions without adequate checks and balances or reviews being implemented. Recommendation Resolving the deficiency may require the Agency to hire additional personnel necessary to adequately separate accounting responsibilities. This solution may result in a substantial increase in operating costs. The other action would be to accept that by definition there is a material weakness in internal control and the cost of eliminating that material weakness may exceed the benefit.
Finding 2022-002
Criteria To provide for better management of the Agency?s financial position, the Agency should maintain full accrual financial statements throughout the fiscal year, rather than producing full accrual statements only at fiscal year end. Condition The Agency does not prepare its internal financial statements on the full accrual method of accounting, but rather maintains the financial records on the basis of cash receipts and cash disbursements. Cause Agency staff do not possess the training necessary to prepare the Agency?s financial statements in accordance with U.S. GAAP in interim periods. Effect The Agency?s interim financial statements do not include accrual transactions. Recommendation The Agency should investigate opportunities to provide staff additional training in GAAP basis financial reporting.
Finding 2022-001
Criteria Segregation of duties should be in place to ensure appropriate checks and balances and to mitigate incompatible duties being performed by one individual over key financial and compliance functions. Condition The Agency does not maintain sufficient segregation of duties to prevent one individual from having control over each of the following areas: 1) Cash receipts ? detailed record keeping, custody, reconciling, and posting to the general ledger. 2) Disbursements ? check preparation, and positing to and maintaining the general ledger. Cause The Agency does not have sufficient staffing to ensure multiple individuals are involved in all significant accounting controls and transaction cycles. Effect One individual may have complete control over certain transactions without adequate checks and balances or reviews being implemented. Recommendation Resolving the deficiency may require the Agency to hire additional personnel necessary to adequately separate accounting responsibilities. This solution may result in a substantial increase in operating costs. The other action would be to accept that by definition there is a material weakness in internal control and the cost of eliminating that material weakness may exceed the benefit.
Finding 2022-002
Criteria To provide for better management of the Agency?s financial position, the Agency should maintain full accrual financial statements throughout the fiscal year, rather than producing full accrual statements only at fiscal year end. Condition The Agency does not prepare its internal financial statements on the full accrual method of accounting, but rather maintains the financial records on the basis of cash receipts and cash disbursements. Cause Agency staff do not possess the training necessary to prepare the Agency?s financial statements in accordance with U.S. GAAP in interim periods. Effect The Agency?s interim financial statements do not include accrual transactions. Recommendation The Agency should investigate opportunities to provide staff additional training in GAAP basis financial reporting.