Separate accounting records for housing project operations - (Material Weakness) Criteria: According to 7 CFR 3560.302, borrowers must establish accounting and financial management procedures necessary to conduct housing project operations in a financially safe and sound manner. Borrowers must maintain records in a manner suitable for an audit, and must be able to report accurate operational results to the Rural Development (RD) from these accounts and records. Condition: The CDP accounting software is not set up to separate transactions for its RD project (Fred Bell Way) and to produce a separate statement of financial position and a general ledger. Cause: The CDP changed its accounting software and merge various accounts during the transition which made it difficult to separate projects' activities and financial records. Effect: Lack of accounting system that segregates and tracks funds for projects allows for comingling of funds from different projects Questioned Cost: None noted Recommendation: Establish an accounting system that provides for separate accountability for projects by segregating and tracking projects funds separately and producing separate financial records for each project. Management's Views and Corrective Action Plan: Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Annual Financial Reports Criteria: According to 7 CFR 3560.308, to ensure that the project is in sound financial condition and is complying with the program financial management requirements, the RD requires annual financial reports to be submitted by each borrower. Condition: The required financial reports and forms for Fred Bell Way were not submitted to the RD. Cause: The CDP staff was not aware of and did not follow the guidelines for annual reporting. Effect: Failure to file annual reports to RD could result in the loss or withholding of rental assistance funds thereby putting a financial strain on the project. Questioned Cost: None noted Recommendation: Establish an understanding and initiate the requirements of the management and reporting of RD funds. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Financial Management System- (Material Weakness) Criteria: According to 2 CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Statement of financial position transactions were not allocated properly to programs/properties funded with federal funds. Cause: Due to a human error of individuals who were handling the accounting entries, some of transactions were not accurately allocated to the correct programs/properties. Effect: Improper allocation of transactions among various programs/properties could lead to comingling of funds from different projects. This could result in unallowable cost or in allowable cost charged simultaneously to two different programs/properties. Questioned Cost: None noted Recommendation: Establish an internal control procedures in place that provide for separate accountability for projects by allocating transactions properly and producing accurate financial reports for each federally funded programs/properties. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Separate accounting records for housing project operations - (Material Weakness) Criteria: According to 7 CFR 3560.302, borrowers must establish accounting and financial management procedures necessary to conduct housing project operations in a financially safe and sound manner. Borrowers must maintain records in a manner suitable for an audit, and must be able to report accurate operational results to the Rural Development (RD) from these accounts and records. Condition: The CDP accounting software is not set up to separate transactions for its RD project (Fred Bell Way) and to produce a separate statement of financial position and a general ledger. Cause: The CDP changed its accounting software and merge various accounts during the transition which made it difficult to separate projects' activities and financial records. Effect: Lack of accounting system that segregates and tracks funds for projects allows for comingling of funds from different projects Questioned Cost: None noted Recommendation: Establish an accounting system that provides for separate accountability for projects by segregating and tracking projects funds separately and producing separate financial records for each project. Management's Views and Corrective Action Plan: Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Annual Financial Reports Criteria: According to 7 CFR 3560.308, to ensure that the project is in sound financial condition and is complying with the program financial management requirements, the RD requires annual financial reports to be submitted by each borrower. Condition: The required financial reports and forms for Fred Bell Way were not submitted to the RD. Cause: The CDP staff was not aware of and did not follow the guidelines for annual reporting. Effect: Failure to file annual reports to RD could result in the loss or withholding of rental assistance funds thereby putting a financial strain on the project. Questioned Cost: None noted Recommendation: Establish an understanding and initiate the requirements of the management and reporting of RD funds. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Financial Management System- (Material Weakness) Criteria: According to 2 CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Statement of financial position transactions were not allocated properly to programs/properties funded with federal funds. Cause: Due to a human error of individuals who were handling the accounting entries, some of transactions were not accurately allocated to the correct programs/properties. Effect: Improper allocation of transactions among various programs/properties could lead to comingling of funds from different projects. This could result in unallowable cost or in allowable cost charged simultaneously to two different programs/properties. Questioned Cost: None noted Recommendation: Establish an internal control procedures in place that provide for separate accountability for projects by allocating transactions properly and producing accurate financial reports for each federally funded programs/properties. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
U.S. Department Of Agriculture (USDA) reporting Criteria: According to 7 CFR 3560.205 - 3560.303, and HB-2-3560, the CDP needs to comply with certain reporting requirements, to include annual submission of housing project budget and self-certification letter. Condition: The CDP did not submit an annual operating budget and self-certification letter to USDA as required by regulations. Cause: The CDP staff was not aware of and did not follow the guidelines for the annual submission of operating budget and self-certification letter to USDA Effect: Increased risk of allocating unallowable costs and/or unauthorized spending. Operating budget enables the CDP to increase rents, adjust utility allowances for residents, and create capital budget. Failure to submit an operating budget may impact the financial health of the project and its residents. Failure to submit a self- certification letter is a violation of USDA performance standards. Questioned Cost: None noted Recommendation: Management to reach out to USDA to clarify a reporting format and put procedures in place to ensure that the annual operating budget as well as interim budget modifications are sent to USDA for review and approval. Management to put procedures in place to ensure a self-certification letter is submitted along with the USDA required financial reports. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Separate accounting records for housing project operations - (Material Weakness) Criteria: According to 7 CFR 3560.302, borrowers must establish accounting and financial management procedures necessary to conduct housing project operations in a financially safe and sound manner. Borrowers must maintain records in a manner suitable for an audit, and must be able to report accurate operational results to the Rural Development (RD) from these accounts and records. Condition: The CDP accounting software is not set up to separate transactions for its RD project (Fred Bell Way) and to produce a separate statement of financial position and a general ledger. Cause: The CDP changed its accounting software and merge various accounts during the transition which made it difficult to separate projects' activities and financial records. Effect: Lack of accounting system that segregates and tracks funds for projects allows for comingling of funds from different projects Questioned Cost: None noted Recommendation: Establish an accounting system that provides for separate accountability for projects by segregating and tracking projects funds separately and producing separate financial records for each project. Management's Views and Corrective Action Plan: Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Annual Financial Reports Criteria: According to 7 CFR 3560.308, to ensure that the project is in sound financial condition and is complying with the program financial management requirements, the RD requires annual financial reports to be submitted by each borrower. Condition: The required financial reports and forms for Fred Bell Way were not submitted to the RD. Cause: The CDP staff was not aware of and did not follow the guidelines for annual reporting. Effect: Failure to file annual reports to RD could result in the loss or withholding of rental assistance funds thereby putting a financial strain on the project. Questioned Cost: None noted Recommendation: Establish an understanding and initiate the requirements of the management and reporting of RD funds. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Financial Management System- (Material Weakness) Criteria: According to 2 CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Statement of financial position transactions were not allocated properly to programs/properties funded with federal funds. Cause: Due to a human error of individuals who were handling the accounting entries, some of transactions were not accurately allocated to the correct programs/properties. Effect: Improper allocation of transactions among various programs/properties could lead to comingling of funds from different projects. This could result in unallowable cost or in allowable cost charged simultaneously to two different programs/properties. Questioned Cost: None noted Recommendation: Establish an internal control procedures in place that provide for separate accountability for projects by allocating transactions properly and producing accurate financial reports for each federally funded programs/properties. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Separate accounting records for housing project operations - (Material Weakness) Criteria: According to 7 CFR 3560.302, borrowers must establish accounting and financial management procedures necessary to conduct housing project operations in a financially safe and sound manner. Borrowers must maintain records in a manner suitable for an audit, and must be able to report accurate operational results to the Rural Development (RD) from these accounts and records. Condition: The CDP accounting software is not set up to separate transactions for its RD project (Fred Bell Way) and to produce a separate statement of financial position and a general ledger. Cause: The CDP changed its accounting software and merge various accounts during the transition which made it difficult to separate projects' activities and financial records. Effect: Lack of accounting system that segregates and tracks funds for projects allows for comingling of funds from different projects Questioned Cost: None noted Recommendation: Establish an accounting system that provides for separate accountability for projects by segregating and tracking projects funds separately and producing separate financial records for each project. Management's Views and Corrective Action Plan: Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Annual Financial Reports Criteria: According to 7 CFR 3560.308, to ensure that the project is in sound financial condition and is complying with the program financial management requirements, the RD requires annual financial reports to be submitted by each borrower. Condition: The required financial reports and forms for Fred Bell Way were not submitted to the RD. Cause: The CDP staff was not aware of and did not follow the guidelines for annual reporting. Effect: Failure to file annual reports to RD could result in the loss or withholding of rental assistance funds thereby putting a financial strain on the project. Questioned Cost: None noted Recommendation: Establish an understanding and initiate the requirements of the management and reporting of RD funds. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Financial Management System- (Material Weakness) Criteria: According to 2 CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Statement of financial position transactions were not allocated properly to programs/properties funded with federal funds. Cause: Due to a human error of individuals who were handling the accounting entries, some of transactions were not accurately allocated to the correct programs/properties. Effect: Improper allocation of transactions among various programs/properties could lead to comingling of funds from different projects. This could result in unallowable cost or in allowable cost charged simultaneously to two different programs/properties. Questioned Cost: None noted Recommendation: Establish an internal control procedures in place that provide for separate accountability for projects by allocating transactions properly and producing accurate financial reports for each federally funded programs/properties. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
U.S. Department Of Agriculture (USDA) reporting Criteria: According to 7 CFR 3560.205 - 3560.303, and HB-2-3560, the CDP needs to comply with certain reporting requirements, to include annual submission of housing project budget and self-certification letter. Condition: The CDP did not submit an annual operating budget and self-certification letter to USDA as required by regulations. Cause: The CDP staff was not aware of and did not follow the guidelines for the annual submission of operating budget and self-certification letter to USDA Effect: Increased risk of allocating unallowable costs and/or unauthorized spending. Operating budget enables the CDP to increase rents, adjust utility allowances for residents, and create capital budget. Failure to submit an operating budget may impact the financial health of the project and its residents. Failure to submit a self- certification letter is a violation of USDA performance standards. Questioned Cost: None noted Recommendation: Management to reach out to USDA to clarify a reporting format and put procedures in place to ensure that the annual operating budget as well as interim budget modifications are sent to USDA for review and approval. Management to put procedures in place to ensure a self-certification letter is submitted along with the USDA required financial reports. Management's Views and Corrective Action Plan : Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost