FINDING: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards (SEFA) Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited consolidated financial statements, related footnote disclosures and SEFA as part of our regular audit services. Ultimately, it is your responsibility to provide for the preparation of your financial statements, disclosures and SEFA, and the responsibility of the auditor to determine the fairness of presentation with those statements. From a practical standpoint, we do these items for you at the same time in connection with our audit, which is not unusual for an organization of your size. However, auditing standards require us to communicate this situation to you in writing as an internal control deficiency. Criteria and Effect: This finding could result in a material misstatement to the financial statements and SEFA that may not have been prevented or detected by you. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-001. Recommendation: It is the responsibility of management to make the ultimate decision whether to accept the degree of risk associated with this condition because of cost or other considerations. We have reviewed in detail with management a draft of the auditor prepared financial statements, to include all audit adjustments, for accuracy and have answered any questions you had. We are satisfied the appropriate steps have been taken to provide you with the completed financial statements. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Audit Adjustments and Segregation of Duties Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Allowable Cost Questioned Costs: None known and likely exceeding $25,000. Condition and Cause: During our engagement, we proposed audit adjustments due to a lack of timely account reconciliations and a lack of review of such reconciliations. Adequate segregation of duties would include timely review of all accounts. The lack of review throughout the year, mainly in the first three quarters of the year, was due to significant turnover in key management positions and a lack of training in the new software implemented in fiscal year 2020. Seven adjustments were made during the engagement. Our engagement identified some invoices without authorized purchase orders or invoices due to software changes. We also noted lease agreements tested that did not match HAP requests. Criteria and Effect: These adjustments were not recorded through the Organization?s existing internal controls, and therefore, resulted in misstatement of the Organization?s financial statements. Supporting documentation did not provide an audit trail. The findings above create an opportunity for incorrect or incomplete financial reporting or fraud. Segregation of duties requires separating the custody of assets, recording of transactions, and review processes in order to promote accuracy and integrity of information. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-002. Recommendation: It is the responsibility of management and those charged with governance to ensure all year end adjusting entries are made and balance sheet accounts are accurate at year end. Management should continue to reconcile all accounts on a monthly basis and ensure proper review of transactions is occurring. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Residual Receipts Reserves Federal Programs Affected: Section 8 Subsidy ALN #14.181 Compliance Requirements: Special Tests and Provisions Questioned Costs: None Condition and Cause: During our engagement, we noted deposits of residual receipts reserves were not made within 60 days of year-end as required by U.S. Department of Housing and Urban Development. Criteria and Effect: U.S. Department of Housing and Urban Development requires the Organization to make deposits to the residual receipts reserves within 60 days of year-end. Repeat Finding from Prior Year: N/A Recommendation We recommend the Organization develop an internal control to track compliance with this compliance requirement. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards (SEFA) Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited consolidated financial statements, related footnote disclosures and SEFA as part of our regular audit services. Ultimately, it is your responsibility to provide for the preparation of your financial statements, disclosures and SEFA, and the responsibility of the auditor to determine the fairness of presentation with those statements. From a practical standpoint, we do these items for you at the same time in connection with our audit, which is not unusual for an organization of your size. However, auditing standards require us to communicate this situation to you in writing as an internal control deficiency. Criteria and Effect: This finding could result in a material misstatement to the financial statements and SEFA that may not have been prevented or detected by you. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-001. Recommendation: It is the responsibility of management to make the ultimate decision whether to accept the degree of risk associated with this condition because of cost or other considerations. We have reviewed in detail with management a draft of the auditor prepared financial statements, to include all audit adjustments, for accuracy and have answered any questions you had. We are satisfied the appropriate steps have been taken to provide you with the completed financial statements. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Audit Adjustments and Segregation of Duties Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Allowable Cost Questioned Costs: None known and likely exceeding $25,000. Condition and Cause: During our engagement, we proposed audit adjustments due to a lack of timely account reconciliations and a lack of review of such reconciliations. Adequate segregation of duties would include timely review of all accounts. The lack of review throughout the year, mainly in the first three quarters of the year, was due to significant turnover in key management positions and a lack of training in the new software implemented in fiscal year 2020. Seven adjustments were made during the engagement. Our engagement identified some invoices without authorized purchase orders or invoices due to software changes. We also noted lease agreements tested that did not match HAP requests. Criteria and Effect: These adjustments were not recorded through the Organization?s existing internal controls, and therefore, resulted in misstatement of the Organization?s financial statements. Supporting documentation did not provide an audit trail. The findings above create an opportunity for incorrect or incomplete financial reporting or fraud. Segregation of duties requires separating the custody of assets, recording of transactions, and review processes in order to promote accuracy and integrity of information. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-002. Recommendation: It is the responsibility of management and those charged with governance to ensure all year end adjusting entries are made and balance sheet accounts are accurate at year end. Management should continue to reconcile all accounts on a monthly basis and ensure proper review of transactions is occurring. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards (SEFA) Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited consolidated financial statements, related footnote disclosures and SEFA as part of our regular audit services. Ultimately, it is your responsibility to provide for the preparation of your financial statements, disclosures and SEFA, and the responsibility of the auditor to determine the fairness of presentation with those statements. From a practical standpoint, we do these items for you at the same time in connection with our audit, which is not unusual for an organization of your size. However, auditing standards require us to communicate this situation to you in writing as an internal control deficiency. Criteria and Effect: This finding could result in a material misstatement to the financial statements and SEFA that may not have been prevented or detected by you. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-001. Recommendation: It is the responsibility of management to make the ultimate decision whether to accept the degree of risk associated with this condition because of cost or other considerations. We have reviewed in detail with management a draft of the auditor prepared financial statements, to include all audit adjustments, for accuracy and have answered any questions you had. We are satisfied the appropriate steps have been taken to provide you with the completed financial statements. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Audit Adjustments and Segregation of Duties Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Allowable Cost Questioned Costs: None known and likely exceeding $25,000. Condition and Cause: During our engagement, we proposed audit adjustments due to a lack of timely account reconciliations and a lack of review of such reconciliations. Adequate segregation of duties would include timely review of all accounts. The lack of review throughout the year, mainly in the first three quarters of the year, was due to significant turnover in key management positions and a lack of training in the new software implemented in fiscal year 2020. Seven adjustments were made during the engagement. Our engagement identified some invoices without authorized purchase orders or invoices due to software changes. We also noted lease agreements tested that did not match HAP requests. Criteria and Effect: These adjustments were not recorded through the Organization?s existing internal controls, and therefore, resulted in misstatement of the Organization?s financial statements. Supporting documentation did not provide an audit trail. The findings above create an opportunity for incorrect or incomplete financial reporting or fraud. Segregation of duties requires separating the custody of assets, recording of transactions, and review processes in order to promote accuracy and integrity of information. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-002. Recommendation: It is the responsibility of management and those charged with governance to ensure all year end adjusting entries are made and balance sheet accounts are accurate at year end. Management should continue to reconcile all accounts on a monthly basis and ensure proper review of transactions is occurring. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Residual Receipts Reserves Federal Programs Affected: Section 8 Subsidy ALN #14.181 Compliance Requirements: Special Tests and Provisions Questioned Costs: None Condition and Cause: During our engagement, we noted deposits of residual receipts reserves were not made within 60 days of year-end as required by U.S. Department of Housing and Urban Development. Criteria and Effect: U.S. Department of Housing and Urban Development requires the Organization to make deposits to the residual receipts reserves within 60 days of year-end. Repeat Finding from Prior Year: N/A Recommendation We recommend the Organization develop an internal control to track compliance with this compliance requirement. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards (SEFA) Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited consolidated financial statements, related footnote disclosures and SEFA as part of our regular audit services. Ultimately, it is your responsibility to provide for the preparation of your financial statements, disclosures and SEFA, and the responsibility of the auditor to determine the fairness of presentation with those statements. From a practical standpoint, we do these items for you at the same time in connection with our audit, which is not unusual for an organization of your size. However, auditing standards require us to communicate this situation to you in writing as an internal control deficiency. Criteria and Effect: This finding could result in a material misstatement to the financial statements and SEFA that may not have been prevented or detected by you. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-001. Recommendation: It is the responsibility of management to make the ultimate decision whether to accept the degree of risk associated with this condition because of cost or other considerations. We have reviewed in detail with management a draft of the auditor prepared financial statements, to include all audit adjustments, for accuracy and have answered any questions you had. We are satisfied the appropriate steps have been taken to provide you with the completed financial statements. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.
FINDING: Audit Adjustments and Segregation of Duties Federal Programs Affected: Housing Trust Fund, ALN #14.275 and Section 8 Subsidy ALN #14.181 Compliance Requirements: Allowable Cost Questioned Costs: None known and likely exceeding $25,000. Condition and Cause: During our engagement, we proposed audit adjustments due to a lack of timely account reconciliations and a lack of review of such reconciliations. Adequate segregation of duties would include timely review of all accounts. The lack of review throughout the year, mainly in the first three quarters of the year, was due to significant turnover in key management positions and a lack of training in the new software implemented in fiscal year 2020. Seven adjustments were made during the engagement. Our engagement identified some invoices without authorized purchase orders or invoices due to software changes. We also noted lease agreements tested that did not match HAP requests. Criteria and Effect: These adjustments were not recorded through the Organization?s existing internal controls, and therefore, resulted in misstatement of the Organization?s financial statements. Supporting documentation did not provide an audit trail. The findings above create an opportunity for incorrect or incomplete financial reporting or fraud. Segregation of duties requires separating the custody of assets, recording of transactions, and review processes in order to promote accuracy and integrity of information. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-002. Recommendation: It is the responsibility of management and those charged with governance to ensure all year end adjusting entries are made and balance sheet accounts are accurate at year end. Management should continue to reconcile all accounts on a monthly basis and ensure proper review of transactions is occurring. Response/Correction Action Plan: Management is in agreement with the finding. See Correction Action Plan.