Finding Text
#2023-005 – 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 Uniform Guidance – 2 CFR §200.508(b) and 2 CFR §200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.”
Statement of Condition: Management was unable to provide written internal controls over financial statement preparation, operations and federal awards.
Cause: Management’s lack of knowledge of the Code of Federal Regulations.
Effect: Corporation was not in compliance with 2 CFR §200. This contributed to the general ledger being incomplete and inaccurate.
Recommendation: Management should establish written internal controls that document the controls over financial statement preparation, operations and federal awards.
Questioned costs: None.