Criteria
For the organization's financial statements to be prepared in accordance with Generally Accepted
Accounting Principles, the standards require that all transactions are accurately recorded,
classified, and presented to reflect the true financial position of the organization. Additionally,
internal controls should be in place to ensure the accuracy, completeness, and reliability of
financial reporting.
Condition
Several material misstatements were identified during the audit, indicating that the organization's
financial statements were not initially prepared in accordance with Generally Accepted
Accounting Principles (GAAP). These misstatements required significant adjustments to correct
errors in revenue recognition, expense classification, and asset valuation, raising concerns about
the effectiveness of the organization's financial reporting processes and internal controls.
Cause
The significant turnover of key management personnel led to a lack of continuity and oversight in
the organization's financial reporting processes. This likely caused a breakdown in internal
controls, insufficient knowledge transfer, and a lack of consistent application of GAAP during the
financial reporting period. Additionally, new or interim management may not have had adequate
experience or familiarity with the organization's financial processes, contributing to the
misstatements.
Effect
The misstatements and improper recording of transactions led to the misstatement of several
accounts resulting in producing inaccurate financial statements. Consequently, several audit
adjustments more than $500,000 were made to ensure the proper alignment of these accounts with
the underlying financial records.
Missing Rent Reasonableness Checklist and Certification Forms
Criteria
Federal regulations W1der the U.S. Department of Housing and Urban Development (HUD) require
that rent paid under certain housing assistance programs (such as HCV or Section 8) must be
reasonable in comparison to similar unassisted units in the area. This is outlined in 24 CFR 982.507
and requires the completion of a rent reasonableness checklist and certification forms to document
compliance.
Condition
During the audit, current management was unable to locate completed rent reasonableness
checklist and certification forms required under the program for several units. Although a blank
form was provided to the auditor, no completed forms for the period under audit were found in the
program's records. Without these forms, the organization cannot demonstrate compliance with the
rent reasonableness requirements, resulting in a material non-compliance with federal program
regulations.
Cause
The issue appears to be related to inadequate record retention and management practices.
Specifically: There may have been a lack of sufficient controls to ensure that completed rent
reasonableness forms were properly retained and easily accessible to current management.
Effed
The failure to provide completed rent reasonableness checklist and certification forms constitutes
a material non-compliance with federal regulations. This non-compliance may put the organization
at risk of federal program findings and potential financial penalties.
Late Submission of the Single Audit Reporting Package
Criteria
The Uniform Guidance (2 CFR 200.512) requires that non-federal entities that expend $750,000
or more in federal awards during a fiscal year must submit the Single Audit reporting package to
the Federal Audit Clearinghouse (FAC) within the earlier of: Thirty (30) calendar days after the
receipt of the auditor's report, or Nine (9) months after the end of the audit period ..
Condition
The organization did not submit its Single Audit reporting package to the Federal Audit
Clearinghouse within the required timeframe. This issue was also identified as a finding during
the fiscal year 2021 audit, indicating that corrective actions were not fully implemented.
Cause
The cause of the late submission appears to be deficiencies in the organization's internal processes
for audit completion and reporting.
Effect
The organization's failure to submit the Single Audit reporting package on time represents noncompliance
with the Uniform Guidance
Criteria
For the organization's financial statements to be prepared in accordance with Generally Accepted
Accounting Principles, the standards require that all transactions are accurately recorded,
classified, and presented to reflect the true financial position of the organization. Additionally,
internal controls should be in place to ensure the accuracy, completeness, and reliability of
financial reporting.
Condition
Several material misstatements were identified during the audit, indicating that the organization's
financial statements were not initially prepared in accordance with Generally Accepted
Accounting Principles (GAAP). These misstatements required significant adjustments to correct
errors in revenue recognition, expense classification, and asset valuation, raising concerns about
the effectiveness of the organization's financial reporting processes and internal controls.
Cause
The significant turnover of key management personnel led to a lack of continuity and oversight in
the organization's financial reporting processes. This likely caused a breakdown in internal
controls, insufficient knowledge transfer, and a lack of consistent application of GAAP during the
financial reporting period. Additionally, new or interim management may not have had adequate
experience or familiarity with the organization's financial processes, contributing to the
misstatements.
Effect
The misstatements and improper recording of transactions led to the misstatement of several
accounts resulting in producing inaccurate financial statements. Consequently, several audit
adjustments more than $500,000 were made to ensure the proper alignment of these accounts with
the underlying financial records.
Missing Rent Reasonableness Checklist and Certification Forms
Criteria
Federal regulations W1der the U.S. Department of Housing and Urban Development (HUD) require
that rent paid under certain housing assistance programs (such as HCV or Section 8) must be
reasonable in comparison to similar unassisted units in the area. This is outlined in 24 CFR 982.507
and requires the completion of a rent reasonableness checklist and certification forms to document
compliance.
Condition
During the audit, current management was unable to locate completed rent reasonableness
checklist and certification forms required under the program for several units. Although a blank
form was provided to the auditor, no completed forms for the period under audit were found in the
program's records. Without these forms, the organization cannot demonstrate compliance with the
rent reasonableness requirements, resulting in a material non-compliance with federal program
regulations.
Cause
The issue appears to be related to inadequate record retention and management practices.
Specifically: There may have been a lack of sufficient controls to ensure that completed rent
reasonableness forms were properly retained and easily accessible to current management.
Effed
The failure to provide completed rent reasonableness checklist and certification forms constitutes
a material non-compliance with federal regulations. This non-compliance may put the organization
at risk of federal program findings and potential financial penalties.
Late Submission of the Single Audit Reporting Package
Criteria
The Uniform Guidance (2 CFR 200.512) requires that non-federal entities that expend $750,000
or more in federal awards during a fiscal year must submit the Single Audit reporting package to
the Federal Audit Clearinghouse (FAC) within the earlier of: Thirty (30) calendar days after the
receipt of the auditor's report, or Nine (9) months after the end of the audit period ..
Condition
The organization did not submit its Single Audit reporting package to the Federal Audit
Clearinghouse within the required timeframe. This issue was also identified as a finding during
the fiscal year 2021 audit, indicating that corrective actions were not fully implemented.
Cause
The cause of the late submission appears to be deficiencies in the organization's internal processes
for audit completion and reporting.
Effect
The organization's failure to submit the Single Audit reporting package on time represents noncompliance
with the Uniform Guidance