Finding Text
2024-002 – Late Submission of Unaudited Financial Statements to HUD - Significant Deficiency Criteria for Specific Requirements: In accordance with HUD’s Uniform Financial Reporting Standards (24 CFR section 5.801), project owners are required to submit a financial statement annually, prepared in accordance with generally accepted accounting principles (GAAP) and in the electronic format specified by HUD. The unaudited financial statement must be submitted within three months (90 days) after the fiscal year-end, while the audited financial statement is due within nine months. These statements should include all financial activities of the program to ensure proper monitoring and compliance with HUD requirements. Condition: During the course of our engagement, we noted that the unaudited financial statements for the year ended were submitted in April 2025, which was after the 90-day deadline. Questioned Cost: There were no questioned costs associated with the condition identified. Cause: Management indicated that staffing changes resulted in a lack of the reporting requirement. The submission was made only after HUD issued a late notice. Effect: The project did not comply with HUD’s reporting requirements, resulting in delayed submission of required financial information and reducing HUD’s ability to perform timely oversight. Auditor's Recommendation: We recommend that management establish procedures and assign clear responsibility to ensure that all HUD-required reports, including unaudited financial statements, are completed and submitted within the required deadlines each year.