FAC Explorer

Audit 8486

FY End
2023-06-30
Total Expended
$3.10M
Findings
4
Programs
6
Organization: Kandiyohi County Housing and Redevelopment Authority (MN)
Year: 2023 Accepted: 2023-12-27
Auditor: Westberg Eischens Pllp

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
6530 2023-001 Material Weakness - P
6531 2023-002 Significant Deficiency - P
582972 2023-001 Material Weakness - P
582973 2023-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.93M Yes 2
14.872 Public Housing Capital Fund $634,534 - 0
14.850 Public and Indian Housing $372,709 - 0
14.218 Community Development Block Grants/entitlement Grants $85,667 - 0
14.267 Continuum of Care Program $52,113 - 0
14.181 Supportive Housing for Persons with Disabilities $17,275 - 0

Contacts

Name Title Type
LTHSSLHNX1Q5 Jill Bengtson Auditee
3202357831 Scott Van Buren Auditor
No contacts on file

Notes to SEFA

Accounting Policies: SCOPE OF AUDIT PURSUANT TO UNIFORM GUIDANCE: The Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the Authority. All federal awards received directly from federal agencies as well as federal awards passed through other governmental agencies or other entities are included in the schedule. BASIS OF PRESENTATION: The Authority’s Schedule of Expenditures of Federal Awards has been prepared using the same basis of accounting as the June 30, 2023 financial statements of the Authority’s enterprise funds. The Authority reports to HUD using the accrual basis of accounting. A complete description of the basis of accounting is included in Note 1 to those financial statements. The Authority did not elect to use the 10 percent de minimis indirect cost rate. CONTINGENCIES: In connection with various federal grant programs, the Authority is obligated to administer related programs and spend the funds in accordance with regulatory restrictions, and is subject to audit by grantor agencies and other auditors. In cases of noncompliance, the agencies involved may require the Authority to refund program funds. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

Finding 2023-001
Finding 2023-001 Criteria: A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent or detect and correct misstatements of the financial statements on a timely basis. A control deficiency that typically is considered significant is the identification by the auditor of a material misstatement in the financial statements that was not identified by the Authority’s internal control. Condition: During our audit we proposed adjustments that resulted in significant changes to the Authority's financial statements. Questioned Costs: None. Effect: The Authority’s inability to detect material misstatements in the financial statements increases the likelihood that the financial statements may not be presented fairly. Cause: Inadequate internal controls and monitoring of internal control by the Authority’s staff. Recommendation: We recommend that the Authority’s management review internal controls currently in place, then design and implement procedures to improve internal controls over financial reporting to detect misstatements in the financial statements.
Finding 2023-002
Finding 2023-002 Criteria: Minnesota Statute §118A.03 requires that all the Authority’s deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged shall be at least ten percent more than the amount on deposit plus accrued interest at the close of the financial institution’s banking day, not covered by insurance or bonds. Condition: At June 30, 2023, the Authority had $129,325 in deposits that were exposed to custodial credit risk. Questioned Costs: None. Effect: The Authority’s deposits were exposed to custodial credit risk. Cause: The Authoity had a lack of adequate collateral. Recommendation: We recommend that the Authority monitor deposits to assure proper collateral is pledged.
Finding 2023-001
Finding 2023-001 Criteria: A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent or detect and correct misstatements of the financial statements on a timely basis. A control deficiency that typically is considered significant is the identification by the auditor of a material misstatement in the financial statements that was not identified by the Authority’s internal control. Condition: During our audit we proposed adjustments that resulted in significant changes to the Authority's financial statements. Questioned Costs: None. Effect: The Authority’s inability to detect material misstatements in the financial statements increases the likelihood that the financial statements may not be presented fairly. Cause: Inadequate internal controls and monitoring of internal control by the Authority’s staff. Recommendation: We recommend that the Authority’s management review internal controls currently in place, then design and implement procedures to improve internal controls over financial reporting to detect misstatements in the financial statements.
Finding 2023-002
Finding 2023-002 Criteria: Minnesota Statute §118A.03 requires that all the Authority’s deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged shall be at least ten percent more than the amount on deposit plus accrued interest at the close of the financial institution’s banking day, not covered by insurance or bonds. Condition: At June 30, 2023, the Authority had $129,325 in deposits that were exposed to custodial credit risk. Questioned Costs: None. Effect: The Authority’s deposits were exposed to custodial credit risk. Cause: The Authoity had a lack of adequate collateral. Recommendation: We recommend that the Authority monitor deposits to assure proper collateral is pledged.