Finding Text
Finding #2025-001: Management Company’s Internal Controls over Financial Reporting Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition: Material audit adjustments were posted to the management company’s accounts, which were necessary to ensure the financial statements are fairly presented in accordance with GAAP. Criteria: Management is responsible for the accuracy and completeness of all financial records and related information to ensure accuracy and presentation in accordance with GAAP. Question Costs: Adjusting journal entries were required in order to present the financial statements in accordance with GAAP. The net impact on the change in net assets was $2,075,072. Effect: The financial statements contained errors and misstatements. Cause: The management company’s internal control policies and procedures did not prevent or detect the errors or misstatement of the financial statements. The current property management company took over in October 2024. Repeat Finding: Yes Recommendation: The management company should review and reconcile all accounts and review the financial data to ensure accuracy, completeness and that financial statements are presented in accordance with GAAP. Management’s Comment: Management is in agreement with finding. Cause: The management company’s internal control policies and procedures did not prevent or detect the errors or misstatements of the financial statements. Auditor’s Comment: ACG plan to transition the operating properties to a new management company during 2026.