Finding Text
Finding # 2025-002 Type: Significant deficiency in internal controls over financial reporting Condition: Audit procedures identified certain year-end cutoff adjustments related to grant revenue and predevelopment costs. Context: The adjustments related to timing differences identified during the year-end close process, including grant revenue earned in 2025 that was recorded when cash was received in 2026 and certain 2025 predevelopment costs that were not accrued at yearend. Cause: Year-end closing procedures did not include sufficient review of subsequent transactions to ensure all assets, liabilities, and related revenue were recorded in the proper period. Effect: As a result, certain assets, liabilities and revenue balances required adjustment to the financial statements to reflect activity in the proper reporting period. Recommendation: We recommend that management strengthen year-end accrual procedures, particularly for grant revenues and housing development activities, and include review of significant subsequent receipts and disbursements. This review should help ensure grant revenue and housing development activities are recorded in the proper period. Management Response: Management agrees with the finding and recommendation. Community Partners of Affordable Housing will strengthen year-end accrual procedures, particularly for grant revenues and housing development activities, and will include review of significant subsequent receipts and disbursements to help ensure grant revenue and housing development activities are recorded in the proper period.