Audit 338711

FY End

2024-10-31

Total Expended

$3.19M

Findings

2

Programs

1

Organization: Realife Cooperative of Hibbing South (MN)

Year: 2024 Accepted: 2025-01-17

Auditor: Westberg Eischens Pllp

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
519622	2024-001	Significant Deficiency	Yes	P
1096064	2024-001	Significant Deficiency	Yes	P

ALN	Program	Spent	Major	Findings
14.126	Mortgage Insurance Cooperative Projects	$3.19M	Yes	1

Contacts

Name	Title	Type
TKDNSELFCYZ1	Don Isaacs	Auditee
3202353727	Michael Gramm	Auditor
No contacts on file

Notes to SEFA

Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Realife Cooperative of Hibbing South has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimus cost rate.

Finding Details

Finding 2024-001

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative's financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative's business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review the auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2023-001. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 26 in this audit report.

Finding 2024-001

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative's financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative's business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review the auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2023-001. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 26 in this audit report.