Audit 391221

FY End

2025-06-30

Total Expended

$1.15M

Findings

1

Programs

1

Organization: Habitat for Humanity Council Bluffs (IA)

Year: 2025 Accepted: 2026-03-10

Auditor: BLAND & ASSOCIATES

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
1177828	2025-002	Material Weakness	Yes	L

ALN	Program	Spent	Major	Findings
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$424,208	Yes	0

Contacts

Name	Title	Type
LABBX44YQMH7	Blake Johnson	Auditee
4025151415	Nick Eker	Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of Habitat for Humanity of Council Bluffs under programs of the federal government for the year ended June 30, 2025. 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 Habitat for Humanity of Council Bluffs, it is not intended to and does not present the financial position, changes in net position, or cash flows of Habitat for Humanity of Council Bluffs. The entity has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.

The Organization uses federal award funds to construct residential housing units. Costs incurred using federal funds are capitalized as Inventory in the statement of financial position while the housing units are under construction. Federal expenditures are recognized on the SEFA when the related costs are incurred, even though such costs are not expensed in the statement of activities until the housing units are sold and the inventory is relieved to cost of goods sold. Accordingly, total federal expenditures reported on the SEFA may exceed expenditures recognized in the statements of activities for the year, as federal costs incurred during the year may remain recorded as inventory at year-end. A reconciliation of federal expenditures reported on the SEFA to expenditures on the statements of activities and changes in net assets is as follows: Federal expenditures included in inventory at year end $ 785,356 Federal expenditures included in costs of goods sold 367,025 Federal expenditures per the SEFA $ 1,152,381

Finding Details

Finding 2025-002

Criteria: Uniform Guidance §200.510(b)(1) requires auditees to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA), in accordance with federal requirements. Additionally, §200.303 requires non-federal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with applicable laws and regulations. Condition: The entity did not prepare an accurate and complete SEFA during the audit process. The SEFA was revised multiple times due to errors and omissions, and significant analysis and recalculation were ultimately performed by the auditors in order to determine the final amounts reported for federal expenditures. Cause: The entity lacks adequate internal controls over the preparation, review, and reconciliation of the SEFA. Specifically, there is insufficient knowledge of SEFA reporting requirements and inadequate review procedures to ensure federal expenditures are properly identified, calculated, and reported prior to submission to the auditors. Effect: As a result, the SEFA initially provided by the entity was materially inaccurate and required multiple revisions. This increased the risk that federal expenditures could be misstated, potentially leading to noncompliance with Uniform Guidance reporting requirements. Additionally, the lack of adequate internal controls resulted in increased audit effort and inefficiencies during the audit process. Recommendation: We recommend that management strengthen internal controls over the preparation of the SEFA by implementing formal procedures to identify, track, and reconcile federal expenditures throughout the year. Management should ensure that staff responsible for SEFA preparation receive appropriate training on Uniform Guidance requirements and that the SEFA is independently reviewed for accuracy and completeness prior to submission to the auditors. Managements Response: Management agrees with this finding.