Audit 411927

2025-001 – Lack of Segregation of Duties Criteria: Internal control is a process, affected by the Housing Authority of the County of Monroe’s (the Authority) board of commissioners, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. A good system of internal control provides for an adequate segregation of duties so that no one individual handles a transaction from its inception to completion. Condition: Due to the limited employees and resources available to the Authority, many aspects of the internal control structure that rely on segregation of duties are missing. Specific accounting processes noted that are affected by the lack of segregation of duties include: cash disbursements, payroll disbursements, cash receipting, and specific reporting functions required for the Authority. Cause: Due to the limited number of personnel within the Authority, segregation of the accounting functions necessary to ensure adequate internal accounting control is not possible. This is not unusual in operations the size of the Authority; however, management should constantly be aware of this condition and realize that the concentration of duties and responsibilities in a limited number of individuals is not desirable from an accounting point of view. Effect: Inadequate segregation of duties could adversely affect the Authority’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by personnel in the normal course of performing their assigned functions. Recommendation: We recommend that the Authority’s board of commissioners and management be aware of the lack of segregation of the accounting functions and, where possible, implement oversight procedures to ensure the internal control policies and procedures are being implemented by personnel to the extent possible. View of Responsible Officials: Management agrees with the finding.

Audit Finding 2025-002 – Reserve Account Deposits Criteria: In accordance with the Rural Development (RD) loan agreement, the Housing Authority is required to make deposits to the reserve for replacements account in an amount approved by RD. The Housing Authority is also required to have approval of withdrawals from the reserve account. Condition: During the year ended December 31, 2025, the Housing Authority did not make the required deposits to the reserve for replacements account as set forth by RD. Cause: Required reserve for replacement deposits were not made due to operating cash shortages. Effect: The Authority is not in compliance with the RD loan agreement. Recommendation: The Authority should transfer the required deposits to the reserve for replacement account as cash flow allows. View of Responsible Officials: Management agrees with the finding.