Finding 1213585 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-05-04

AI Summary

  • Core Issue: The Organization lacked adequate controls in its financial reporting process, leading to significant adjustments in its SEFA.
  • Impacted Requirements: Compliance with financial reporting standards was not met, risking material misstatements.
  • Recommended Follow-Up: The Organization should strengthen its internal controls and procedures to ensure accurate and complete financial reporting.

Finding Text

Finding No. 2025-001: Financial Reporting (Material Weakness) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: HOME Investment Partnerships Program Federal Assistance Listing Number: 14.239 Compliance Requirement: Reporting Condition Southwest 141 Street Housing Development Fund Company, Inc. (the "Organization") did not have adequate controls over the financial reporting process and, as a result, material adjustments to its SEFA were required. Criteria The Organization should maintain appropriate controls over the financial reporting process to prevent or detect material misstatements in its SEFA. Cause The Organization did not have sufficient controls over the financial reporting process to allow for accurate SEFA preparation. Effect Material adjustments were made to the SEFA for the inclusion of an additional program and related amount. Auditor non-compliance code S - Internal control deficiencies Identification of repeat finding The finding is a not repeat finding. Questioned costs None Finding resolution status This finding has been remediated. Recommendation The Organization should review and enhance its internal controls, policies and procedures to ensure complete and accurate reporting.

Corrective Action Plan

Views of responsible officials Omissions in the SEFA maintained during 2025 primarily pertain to construction lending by the City of New York’s Department of Housing Preservation and Development that utilized underlying federal funding. Management inadvertently only presented the construction lending in the years of expenditure. Such expenditures were duly reported upon and audited during the years of expenditures and were maintained within the financial records of Southwest 141 Street Housing Development Fund Company, Inc. but were subsequently omitted from the SEFA in the years following. Management concurs with Finding No. 2025-001 and, as of March 2026, management has enhanced its internal controls and augmented its personnel to ensure that such reporting under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards is compliant, complete, and accurate for the 2025 SEFA and going forward.

Categories

Reporting Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $9.39M
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $1.72M
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $1.12M