Finding 1088910 (2023-003)

#2023-003 – Assistance Listing Number 14.155 Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, U.S. Department of Housing and Urban Development Material Weakness in Internal Control and Failure to Comply with Federal Requirements of Contracts. Criteria: The audited financial statements are required to be submitted to the PIH-REAC online system within 90 days of year end according to the Uniform Financial Reporting Standards (UFRS) for not-for-profit multifamily program participants, HUD Audit Guide 2000.04 Chapter §3.3 and the Uniform Guidance – 2 CFR §200.514(d)(1). Statement of Condition: The audited financial statements were not submitted into the PIH-REAC online system within 90 days of year end. The Corporation’s management did not engage an auditor until April 4, 2024. Cause: Corporation experienced turnover in the Executive Director and other positions near year end. This turnover caused the books not to be closed in a timely manner and the books were not closed accurately. This contributed to the late submission of the financial statements into the PIH-REAC system. Effect: Corporation was not in compliance with the regulatory agreement. Recommendation: Management should close the books after year-end in a timely manner. Management should also engage an auditor before the end of the year to ensure the submission of financial data into the PIH-REAC system within ninety (90) days following year-end. Questioned costs: None.