Finding 22662 (2022-001)

Finding # 2022-001 Federal Grantor: Department of Housing and Urban Development AL # / Program : 14.155 - Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Type of Finding: Financial Statement Finding Finding Resolution Status: Unresolved Information on Universe Population Size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Criteria: Internal controls over financial reporting should be designed and operating sufficient to prevent and/or detect material misstatement to the financial statements. Statement of Condition: A material audit adjustment was proposed to have the financial statements be reasonably stated in accordance with generally accepted accounting principles in the United States of America. Cause: Internal controls over financial reporting were insufficient to prevent and/or detect material misstatement to the financial statements. Effect or Potential Effect: The unadjusted financial statements were not reasonably stated in accordance with generally accepted accounting principles in the United States of America. Auditor Non-Compliance Code: S - Internal Control Deficiencies Questioned Costs: N/A Reporting Views of Responsible Officials: Management disagrees that a material audit adjustment is indicative of a material weakness in internal controls. Context: During testing of commercial rents, it was noted that the Corporation had assigned their interest in the commercial leases to YWCA GGSV however, these amounts should be deposited into the operating account of the project. Recommendations: We recommend that management evaluate internal controls over financial reporting to ensure the existence of adequate processes and procedures to prevent and/or detect material misstatements to the financial statements. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management disagrees that a material audit adjustment is indicative of a material weakness in internal controls. Response Indicator: Disagree Completion Date: 12/31/2022 Response: See Corrective Action Plan