FAC Explorer

Finding 10181 (2023-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-01-25
Audit: 13778
Organization: Independence Place Cooperative of Willmar (MN)
Auditor: Westberg Eischens Pllp

AI Summary

  • Core Issue: The Cooperative relies on the auditor for preparing GAAP-compliant financial statements due to limited staff and resources.
  • Impacted Requirements: The inability to prepare financial statements internally affects compliance with GAAP.
  • Recommended Follow-up: The Cooperative should continue reviewing auditor-prepared statements to enhance understanding and acceptance of financial reporting responsibilities.

Finding Text

Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative is unable to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2022-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan.

Corrective Action Plan

Housing and Urban Development Independence Place Cooperative respectfully submits the following corrective action plan for the year ended December 31, 2023. Westberg Eischens, PLLP 2630 1st Street South P.O. Box 362 Willmar, MN 56201 Audit Period: December 31, 2023 The finding from the December 31, 2023 schedule of findings and questioned costs and the summary schedule of prior audit findings is discussed below. The finding is numbered consistently with the number assigned in the schedules. Summary of audit results does not include findings and is not addressed. Finding 2023-001 Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 586623 2023-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.126 Mortgage Insurance_cooperative Projects $3.28M