Finding No. 2022-001 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 ? Lower Income Housing Assistance Program Supportive Housing for the Elderly (Section 202) Mortgage Financing CFDA #: 14.195 14.157 Questioned Costs: None Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Condition: There is minimal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, small projects, for sound economic conditions, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Cause: For sound economic reasons, the Corporation and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Recommendation: When this condition exists, management?s close supervision and review of accounting information is the best means of preventing or detecting errors and irregularities. Management Response: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.
Finding No. 2022-002 ? Preparation of Financial Statements Criteria: A strong system of internal controls requires the Corporation to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Condition: The Corporation also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of the Corporation?s internal control system. Cause: The Corporation engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Corporation would require the employment of additional personnel. Consequently, corrective action may not be practical. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Corporation should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Corporation?s activities and operations. Management Response: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.
Finding No. 2022-001 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 ? Lower Income Housing Assistance Program Supportive Housing for the Elderly (Section 202) Mortgage Financing CFDA #: 14.195 14.157 Questioned Costs: None Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Condition: There is minimal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, small projects, for sound economic conditions, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Cause: For sound economic reasons, the Corporation and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Recommendation: When this condition exists, management?s close supervision and review of accounting information is the best means of preventing or detecting errors and irregularities. Management Response: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.
Finding No. 2022-002 ? Preparation of Financial Statements Criteria: A strong system of internal controls requires the Corporation to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Condition: The Corporation also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of the Corporation?s internal control system. Cause: The Corporation engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Corporation would require the employment of additional personnel. Consequently, corrective action may not be practical. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Corporation should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Corporation?s activities and operations. Management Response: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.
Finding No. 2022-001 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 ? Lower Income Housing Assistance Program Supportive Housing for the Elderly (Section 202) Mortgage Financing CFDA #: 14.195 14.157 Questioned Costs: None Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Condition: There is minimal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, small projects, for sound economic conditions, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Cause: For sound economic reasons, the Corporation and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Recommendation: When this condition exists, management?s close supervision and review of accounting information is the best means of preventing or detecting errors and irregularities. Management Response: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.
Finding No. 2022-002 ? Preparation of Financial Statements Criteria: A strong system of internal controls requires the Corporation to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Condition: The Corporation also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of the Corporation?s internal control system. Cause: The Corporation engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Corporation would require the employment of additional personnel. Consequently, corrective action may not be practical. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Corporation should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Corporation?s activities and operations. Management Response: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.
Finding No. 2022-001 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 ? Lower Income Housing Assistance Program Supportive Housing for the Elderly (Section 202) Mortgage Financing CFDA #: 14.195 14.157 Questioned Costs: None Criteria: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Condition: There is minimal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. Due to budgetary constraints imposed by HUD, small projects, for sound economic conditions, must function with a small number of office personnel and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Cause: For sound economic reasons, the Corporation and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Recommendation: When this condition exists, management?s close supervision and review of accounting information is the best means of preventing or detecting errors and irregularities. Management Response: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.
Finding No. 2022-002 ? Preparation of Financial Statements Criteria: A strong system of internal controls requires the Corporation to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Condition: The Corporation also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of the Corporation?s internal control system. Cause: The Corporation engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Corporation would require the employment of additional personnel. Consequently, corrective action may not be practical. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Corporation should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Corporation?s activities and operations. Management Response: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.