Finding 1229268 (2025-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-09-10

AI Summary

  • Core Issue: The Housing Authority failed to submit accurate multifamily financial statements for 2021 and has not submitted them for 2022-2025.
  • Impacted Requirements: Internal control systems must ensure financial statements comply with Generally Accepted Accounting Principles.
  • Recommended Follow-Up: Strengthen internal controls to prevent future deficiencies and ensure timely submissions.

Finding Text

Compliance Requirement: Accounting Internal Controls Condition and Criteria: Housing Authorities are required to have a sound internal control system in place to ensure that the financial statements are fairly stated, in all material respects, in accordance with Generally Accepted Accounting Principles. It was noted that the unaudited multifamily submission was not submitted correctly for calendar year 2021. Furthermore, the Housing Authority has not submitted unaudited multifamily submissions for calendar years 2022 through 2025. Also, it was noted that numerous entries had to be made in order to achieve this goal. Type of Finding: Significant Deficiency Cause: The internal control structure was not adequate to prevent these deficiencies. Effect: Numerous audit adjusting entries had to be made. Questioned Costs: None known. Auditors’ Recommendation: We recommend that the Housing Authority strengthen its internal controls to compliance with this requirement.

Corrective Action Plan

Corrective Action Plan: The Housing Authority concurs with the recommendation. The Authority recognizes that limited accounting staff and competing operational demands contributed to delays in completing accurate unaudited multifamily submissions and timely identifying necessary adjusting entries. Management is implementing a sustainable solution that combines specialized technical assistance, documented procedures, staff training, and executive review. The Authority has begun reviewing the calendar year 2021 submission and compiling the financial records required for the outstanding 2022 through 2025 submissions. The Authority is seeking to retain an expert in HUD Multifamily and REAC financial reporting to assist staff in correcting prior submissions and preparing, validating, and submitting all required filings. The Authority will complete the following corrective actions: 1. Reconcile and validate the general ledger balances, trial balances, and supporting schedules for each affected reporting year. 2. Correct and resubmit the calendar year 2021 unaudited multifamily submission and prepare and submit the required unaudited multifamily submissions for calendar years 2022 through 2025. 3. Establish a written year-end closing and REAC submission calendar and checklist identifying responsible staff, required supporting schedules, due dates, and supervisory review before submission. 4. Provide appropriate staff training and require quarterly management review of balance-sheet reconciliations, audit-adjustment status, and HUD submission deadlines until the backlog is eliminated and the revised controls are operating effectively. hese measures are designed to address the Authority's limited staffing capacity while creating a practical and sustainable process for accurate financial reporting and timely HUD submissions.

Categories

Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1229267 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.195 SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM $1.53M
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $95,501