Finding Text
Finding reference number: 2024-002
Assistance Listing (Federal award identification number and year): Supportive Housing for the
Elderly, Assistance Listing No. 14.157, 122-EE166-WAH-NP and 2002
Auditor non-compliance code: Z – Other
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: N/A
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2024-002: The Corporation's accounting books and records as submitted
for audit included certain accounts which were not presented in accordance with accounting standards
generally accepted in the United States of America ("GAAP"). As a result, audit adjustments provided
by management were required to present the December 31, 2024 financial statements in accordance
with GAAP.
Criteria: Pursuant to the Regulatory Agreement, the books and records of the Company are required
to be kept in accordance with the requirements of HUD, which includes adequate design and
monitoring of controls to safeguard the Corporation's assets. Chapter 2 of the Financial Operations
and Accounting Procedures of Insured Multi-Family Projects Handbook (Handbook 4370.2 Rev.1)
provides the accounting and financial operations requirements of a HUD insured multi-family property
including: maintenance of books and records, completeness and accuracy of books and records, and
an auditable paper trail.
Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. Audit
adjustments provided by management were required to present the December 31, 2024 financial
statements in accordance with GAAP.
Cause: Certain reconciliations were not completed or reviewed timely which resulted in unrecorded
journal entries.
Recommendation: Management should review the internal controls to ensure that the accounting
software allows for timely recording of information and that a timely review of the reconciliations is
completed by another accountant not responsible for the month end close.
Management's response: Management concurs with the finding and the auditor's recommendation.
The accounting software provider is being changed and a new system to indicate review and approval
of the month end closing process will be implemented.