Audit 45683

2022-01 ? Financial Statement Close Procedures and Material Audit Adjustments Criteria: During the course of the audit, I proposed material audit adjustments that would not have been identified through the Organization?s internal control process, and therefore could have resulted in misstatements of the Organization?s financial statements. In particular, some of the Organization?s bank accounts were not properly reconciled at year end. The internal control structure should include procedures to ensure that account balances are properly stated and reconciled at year-end in a timely manner. Condition: An internal control system design must include elements to properly reconcile account balances at year-end, post closing entries, and to record items in accordance with generally accepted accounting principles. Cause: The Organization does not have a proper internal control structure in place to identify material misstatements. Effect: Material audit adjustments were proposed and made through the course of the audit. If these adjustments were not recorded, the financial statements could have been materially misstated. Recommendation: Management should develop a review process to ensure that the financial information is recorded appropriately in accordance with generally accepted accounting principles and is properly reconciled and recorded at year-end in a timely manner. Management should also consider outsourcing accounting expertise to a local CPA firm if they do not have staff with the requisite accounting expertise in-house. Views of Responsible Officials: Management will work to develop procedures to ensure that balances are appropriately reconciled at year-end and recorded in accordance with generally accepted accounting principles. Corrective Action Plan: In response to the finding labeled 2022-02, the Organization has begun to improve its processes to close year-end books in a timely manner including reconciling bank accounts and other significant accounts. The Organization has retained the services of a consulting CPA to assist in reviewing and reconciling accounts as needed.

2022-02 Single Audit Completion and Submission Federal CFDA Program Title Number Rural Rental Housing Loans 10.415 Criteria: 2 CFR Section 200.512 (a)(1) states that the Organization?s single audit must be completed and the data collection form must be submitted nine months after the end of the audit period. Condition: The Organization did not complete and submit its 2021 single audit within nine months after the end of the audit period. In particular, the Data Collection Form for the 2021 single audit was never finalized and submitted by the Organization. Cause: The Organization does not have a proper internal control structure in place to complete its single audit requirement in a timely manner. Effect: Users of the financial statements do not have timely access to the Organization?s financial information. Questioned Costs: None Recommendation: Management should develop a review process to ensure that the financial information is recorded appropriately in accordance with generally accepted accounting principles, is properly reconciled and recorded at year-end in a timely manner, and audits are completed in a timely manner in accordance with 2 CFR Section 200.512. Views of Responsible Officials: Management will work to develop the proper procedures to ensure that balances are appropriately reconciled at year-end and recorded in accordance with generally accepted accounting principles, so that the reporting requirements in 2 CFR Section 200.512 are met. Corrective Action Plan: In response to the finding labeled 2022-02, the Organization has begun to improve its processes to close year-end books in a timely manner and produce financial statements in a manner that accommodates a single audit filing within published timeframes.

2022-01 ? Financial Statement Close Procedures and Material Audit Adjustments Criteria: During the course of the audit, I proposed material audit adjustments that would not have been identified through the Organization?s internal control process, and therefore could have resulted in misstatements of the Organization?s financial statements. In particular, some of the Organization?s bank accounts were not properly reconciled at year end. The internal control structure should include procedures to ensure that account balances are properly stated and reconciled at year-end in a timely manner. Condition: An internal control system design must include elements to properly reconcile account balances at year-end, post closing entries, and to record items in accordance with generally accepted accounting principles. Cause: The Organization does not have a proper internal control structure in place to identify material misstatements. Effect: Material audit adjustments were proposed and made through the course of the audit. If these adjustments were not recorded, the financial statements could have been materially misstated. Recommendation: Management should develop a review process to ensure that the financial information is recorded appropriately in accordance with generally accepted accounting principles and is properly reconciled and recorded at year-end in a timely manner. Management should also consider outsourcing accounting expertise to a local CPA firm if they do not have staff with the requisite accounting expertise in-house. Views of Responsible Officials: Management will work to develop procedures to ensure that balances are appropriately reconciled at year-end and recorded in accordance with generally accepted accounting principles. Corrective Action Plan: In response to the finding labeled 2022-02, the Organization has begun to improve its processes to close year-end books in a timely manner including reconciling bank accounts and other significant accounts. The Organization has retained the services of a consulting CPA to assist in reviewing and reconciling accounts as needed.

2022-02 Single Audit Completion and Submission Federal CFDA Program Title Number Rural Rental Housing Loans 10.415 Criteria: 2 CFR Section 200.512 (a)(1) states that the Organization?s single audit must be completed and the data collection form must be submitted nine months after the end of the audit period. Condition: The Organization did not complete and submit its 2021 single audit within nine months after the end of the audit period. In particular, the Data Collection Form for the 2021 single audit was never finalized and submitted by the Organization. Cause: The Organization does not have a proper internal control structure in place to complete its single audit requirement in a timely manner. Effect: Users of the financial statements do not have timely access to the Organization?s financial information. Questioned Costs: None Recommendation: Management should develop a review process to ensure that the financial information is recorded appropriately in accordance with generally accepted accounting principles, is properly reconciled and recorded at year-end in a timely manner, and audits are completed in a timely manner in accordance with 2 CFR Section 200.512. Views of Responsible Officials: Management will work to develop the proper procedures to ensure that balances are appropriately reconciled at year-end and recorded in accordance with generally accepted accounting principles, so that the reporting requirements in 2 CFR Section 200.512 are met. Corrective Action Plan: In response to the finding labeled 2022-02, the Organization has begun to improve its processes to close year-end books in a timely manner and produce financial statements in a manner that accommodates a single audit filing within published timeframes.