Finding 1088911 (2023-004)

#2023-004 – 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: Uniform Guidance – 2 CFR §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.” Statement of Condition: The data collection form and audited financial statements were not submitted to the Federal Audit Clearinghouse system by the earlier of thirty (30) after the audit was complete or nine (9) months after the year end. Cause: Management’s lack of knowledge of HUD and Uniform Guidance requirements. Management did not engage the auditor until April 7, 2024. This was after the due date of the REAC submission. Auditors were not provided all requested documentation by requested dates. Auditors were not able to schedule fieldwork until after the Federal Audit Clearinghouse due date. Effect: Corporation was not in compliance with 2 CFR §200.512. Recommendation: Management should close the books after year-end in a timely manner. Management should then submit that financial data into the Federal Audit Clearinghouse system within 90 days following year-end. Questioned costs: None.