Audit 42977

Finding 2022-003: Internal Control Structure - Eligibility Rural Rental Housing Loan - 10.415 Material Weakness Repeat Finding ? Finding 2021-002 Criteria: The Project is responsible for establishing an effective internal control process to ensure the Project complies with the requirements governing the Rural Rental Housing program. Condition: The Project only has one staff which handles the compliance issues which makes it difficult for the Project to have controls beyond the Project Manager?s knowledge and as a result has a lack of segregation of duties over this area. Cause: The Project has limited resources and one staff assigned to this function. Effect or Potential Effect: The control deficiencies result in more than a reasonable possibility that a material noncompliance with program requirements could occur and not be prevented or detected. Recommendation: As noted above, the Project has limited resources and may not be able to correct the deficiencies noted above. The Project should review the condition above and adopt procedures where feasible. Controls and procedures should be documented. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

Finding 2022-004: Year End Report Rural Rental Housing Loan - 10.415 Noncompliance/Material Weakness Criteria: The Project is responsible for completing and submitting Form RD 3560-7, Form RD 3560-10 and Attachment 4-F, Performance Standards Borrower Self-Certification Letter, within 90 days following the close of the project year end. Condition: We had requested copies of Form RD 3560-7, Form RD 3560-10 and Attachment 4-F for the yead ended December 31, 2022 and management indicated they had not yet completed them yet which was beyond the 90 day requirement. Cause: The three reports are the responsibility of one individual to complete and they indicated they were waiting on the audited financials to be complete. The three reports are due in 90 days after the fiscal year end and the audit is not due for 9 months past the fiscal year end. Effect or Potential Effect: The Project was in material noncompliance with U.S.D.A. Rural Development reporting requirements. Recommendation: The Project should complete and submit the late reports immediately. Further Project should have procedures in place to ensure the require reports are submitted within the deadline. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

Finding 2022-003: Internal Control Structure - Eligibility Rural Rental Housing Loan - 10.415 Material Weakness Repeat Finding ? Finding 2021-002 Criteria: The Project is responsible for establishing an effective internal control process to ensure the Project complies with the requirements governing the Rural Rental Housing program. Condition: The Project only has one staff which handles the compliance issues which makes it difficult for the Project to have controls beyond the Project Manager?s knowledge and as a result has a lack of segregation of duties over this area. Cause: The Project has limited resources and one staff assigned to this function. Effect or Potential Effect: The control deficiencies result in more than a reasonable possibility that a material noncompliance with program requirements could occur and not be prevented or detected. Recommendation: As noted above, the Project has limited resources and may not be able to correct the deficiencies noted above. The Project should review the condition above and adopt procedures where feasible. Controls and procedures should be documented. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

Finding 2022-004: Year End Report Rural Rental Housing Loan - 10.415 Noncompliance/Material Weakness Criteria: The Project is responsible for completing and submitting Form RD 3560-7, Form RD 3560-10 and Attachment 4-F, Performance Standards Borrower Self-Certification Letter, within 90 days following the close of the project year end. Condition: We had requested copies of Form RD 3560-7, Form RD 3560-10 and Attachment 4-F for the yead ended December 31, 2022 and management indicated they had not yet completed them yet which was beyond the 90 day requirement. Cause: The three reports are the responsibility of one individual to complete and they indicated they were waiting on the audited financials to be complete. The three reports are due in 90 days after the fiscal year end and the audit is not due for 9 months past the fiscal year end. Effect or Potential Effect: The Project was in material noncompliance with U.S.D.A. Rural Development reporting requirements. Recommendation: The Project should complete and submit the late reports immediately. Further Project should have procedures in place to ensure the require reports are submitted within the deadline. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.