Finding 1077980 (2023-002)

Federal Agency: U.S. Department of Agriculture Federal Program Titles: Rural Rental Housing Loans Federal Assistance Listing Numbers: 10.415 Noncompliance - Reporting Requirements Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Controls over Compliance Criteria: Reporting Requirements. The Authority is required to prepare Form RD 3560-7, Multiple Family Housing Project Budget/Utility Allowance Budget Actuals, and Form RD 3560-10, MFH Borrower Balance Sheet to the USDA for each RD property per USDA HB-2-3560 year-end reporting requirements. Condition: Based upon inspection of the Authority's Form RD 3560-7 and Form 3560-10 and discussions with management, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for each property during the audit period. Context: During the audit period, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for RRHL property, Sunnyview Apartments. Cause: There is a significant deficiency in internal controls over the compliance related to the reporting requirements for Forms RD 3560-7 and RD 3560-10. Effect: The Rural Rental Housing Loan program is in non-compliance with the reporting requirements related to Forms RD 3560-7 and RD 3560-10. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and U.S. Department of Agriculture reporting requirements. Views of responsible officials and planned corrective action plan: Management agrees with the finding and will implement the aforementioned recommendations.