Finding Text
Criteria: Management is responsible for the preparation of the basic financial statements and all accompanying information as well as representations contained therein, and the fair presentation in conformity with U.S. GAAP. This requires management to perform a year-end closing process to accumulate, reconcile and summarize information for inclusion in the annual financial statements. Condition: Monthly review of transactions posted to Yardi and the general ledger system was not implemented properly to detect discrepancies or errors in a timely manner. We identified numerous adjustments, which were posted as part of the audit. Context: The condition was noted during our audit of the entity for the year ended June 30, 2025. Effect: Journal entries were posted, and adjustments made to the financial statements, in order to fairly present the financial statements. Further, the internal control environment is weakened. Cause: The entity’s procedures did not allow for the proper classification or timely reporting of information required for financial reporting. The entity’s process did not allow for evidence to support internal controls in place over the preparation of the financial statements. Recommendation: We recommend staff training at the property level to perform monthly review of accounting records and reconciliations between Yardi and general ledger system to ensure amounts are properly captured, reconciled, classified, and reported in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management agrees. The Accounting Manager and Executive Director for the year ended June 30, 2025 were terminated in October 2025, and the former Executive Director has returned to assist in implementing necessary controls and processes and train property level staff.