Finding Text
2025-004 Improper Revenue Recognition Practices Criteria: Revenue recognition must be supported by adequate internal controls, proper documentation, and consistent application. Failure to comply can result in material misstatements of revenue, receivables, and related accounts. Condition: During the audit, we identified deficiencies in the housing authority's revenue recognition process. A sample of revenue transactions revealed that revenue was frequently recognized without sufficient support from the Capital Fund Program ($92,807.06), Low Rent program ($407,580.87), and Housing Choice Voucher program ($538,791.86). Questioned Costs: $1,039,179.79 Effect: Overstatement of revenue in the audit period and corresponding misstatement of earning, assets, and liabilities. Cause: Inadequate review controls in the revenue cycle. Recommendation: We recommend that the Housing Authority maintain complete files with evidence of revenue transactions.