Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for the Elderly
Assistance Listing Number: 14.157
Federal Award Identification Number and Year: WI39S961001
Award Period: 2023-2024
Type of Finding:
Material Weakness in Internal Control over Financial Reporting
Material Weakness in Internal Control Over Compliance
Criteria or specific requirement: Generally, a system of internal control contemplates separation of
duties such that no individual has responsibility to execute a transaction, have physical access to the
related assets, and have responsibility or authority to record the transaction.
Condition: Responsibilities related to cash receipts, cash disbursements, certifications of tenant
eligibility, replacement reserve deposits, residual receipts deposits, and financial reporting have not
been segregated; a single individual collects receipts, prepares and signs checks, prepares and
approves certifications of tenant eligibility, and maintains the accounting records if the Project. Neither
cash receipts, cash disbursements, financial records, not bank reconciliations are reviewed on a regular
basis by an individual other than the preparer. Monitoring controls are not in place to ensure the
certifications of tenant eligibility have been completed accurately and timely, replacement reserve
deposits are made monthly, or the residual receipts calculation is accurate and any required deposits
are made within 90 days of the end of the fiscal year.
Questioned Costs: None
Context: Small staff prevents adequate segregation of duties.
Cause: The Project is management by management agent with limited staff. Small Staff prevents
adequate segregation of duties.
Effect: Lack of segregation of duties could result in financial statement misstatement, caused by error
or fraud, that would not be detected or prevented by the Project.
Repeat Finding: Repeat Finding 2023-003.
Recommendation: The Project should continue to evaluate its staffing in order to segregate
incompatible duties whenever possible.
Views of Responsible officials and planned corrective actions: There is no disagreement with the
finding. The board of directors will continue to closely monitor the financial operations of the Project.