Audit 369688

Finding 2024-001 Segregation of Duties Condition: The Corporation’s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.

Finding 2024-002 Tenant File Documentation Condition: Five tenants did not have a signed rental agreement on file, one tenant’s income on the tenant certification could not be recomputed, one tenant did not have a signed tenant certification, and no new tenants had inspections signed. Criteria: The Corporation should ensure that tenant files are complete with all documentation and signatures. Cause: The Corporation’s previous property manager did not have a system in place to verify tenant files were up to date. Effect: This deficiency would not have a material effect on the tenant rent. Recommendation: We recommend the Corporation create a checklist to ensure that tenant files are properly documented. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditgor and will take it under advisement.

Finding 2024-003 Reserve Funds Condition: The required annual payments have not been made to the reserve funds. Criteria: The Corporation is required to make annual payments to the reserve funds until the funds reach a minimum dollar amount. Cause: There is not a system in place to make the required annual payments to the reserve funds. Effect: Not funding the reserve funds could adversely affect the Corporation’s compliance with the USDA-Rural Development regulations. Recommendation: We recommend that the Corporation discuss with the USDA the required minimum amounts in the reserve funds and determine what the annual payments should be for each apartment building. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditgor and will take it under advisement.

Finding 2024-004 MINC Reports Were Not Timely Filed Condition: MINC reports were submitted July 9, 2025. Criteria: MINC reports are required to be filed by March 31. The Corporation was given a 30 day extension. Cause: The necessary information needed to finish the reports was not given to the accountant until July. Effect: Not filing the MINC reports timely could affect the Corporation’s compliance with the USDA-Rural Development regulations. Recommendation: We recommend that the Corporation file the MINC reports timely. Repeat Finding: No. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.

Finding 2024-005 No Board Meetings Were Held During 2024 Condition: An annual board meeting was not held during 2024 due to lack of a quorum of board members. Criteria: Non-profit organizations are to certify that the board is active and maintains oversight of the property. Cause: Board members resigned, and their positions were not filled. Effect: Having an inactive board could affect the Corporation’s compliance with the USDA-Rural Development regulations. Recommendation: We recommend that board members are found, and a board meeting is held. Repeat Finding: No. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.

Finding 2024-006 Incurred Late Payment Fees On Invoices Condition: Professional fees invoice had late fees added to the original bill since the invoice was not paid timely. Criteria: The Corporation should have cash management procedures in place to mitigate the risk of incurring unnecessary expenses. Cause: There was not enough money in the operating account when the invoice was received. Effect: The Corporation paid for expenses that were not necessary. Recommendation: We recommend that all invoices are paid timely to avoid late fees. Repeat Finding: No. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor and will take under advisement.