Finding 1072744 (2023-001)

Finding No. 2023-001: Financial Reporting (Material Weakness) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project-Based Cluster Federal Assistance Listing Number: 14.195, 14.182 Compliance Requirement: Reporting Criteria Housing and Services, Inc. and Related Entities (collectively, the "HSI Group") should maintain appropriate controls over the financial reporting process to prevent or detect material misstatements in its schedule of expenditures of federal awards ("SEFA") and timely file consolidated and combined audited financial statements to the federal audit clearinghouse ("FAC"). Condition The HSI Group did not have adequate controls over the financial reporting process and, as a result, was unable to timely file audited consolidated and combined financial statements to FAC and material adjustments to its SEFA were required. Cause HSI Group did not have sufficient controls over the financial reporting process to allow for timely filing of audited consolidated and combined financial statements to FAC and accurate SEFA preparation. Effect HSI Group did not submit its 2022 audited consolidated and combined financial statements to FAC within nine months of its fiscal year end and material adjustments were made to the SEFA for the inclusion of additional amounts and programs.The finding is a not repeat finding. Questioned costs None Recommendation HSI Group should review and enhance its internal controls, policies and procedures to ensure that the year-end close process is performed in a timely and accurate manner and includes complete and accurate reporting.