Finding 1238127 (2025-001)

Findings reference number: 2025-001 - Title and AL Number of Federal Program: Section 8 Moderate Rehabilitation Single Room Occupancy (AL 14.249). - Type of finding: Internal Control - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: The detail for significant accounts should be analyzed on a timely basis to ensure the information is correct. - Statement of condition: Certain general ledger accounts, including cash and prepaid rent were not properly reconciled at December 31, 2025 and significant adjusting entries had to be made. Other entries were made for items that were improperly posted in the general ledger or needed to be accrued at year end. - Cause: Management oversight. - Effect: The in house financial statements overstated cash and prepaid rent by significant amounts and understated revenue. - Questioned costs: N/A. - Reporting views of officials: Auditee agrees with the finding. - Contract Number: N/A - Context: Management had some turnover in key personnel and moved its office to a new location. The office also needed a significant amount of improvements. Management's efforts were concentrated on the improvements and some of the accounting functions were overlooked. - Recommendation: Procedures should be set in place to ensure timely analysis of significant accounts are made and the books are reconciled properly. - Auditors' summary of auditee's comments: They are in agreement.