Finding Text
Compliance Requirement: Reporting Criteria: In accordance with the Department of Housing and Urban Development Chapter 3 Audit Guidance, the regulatory agreement related to the project requires that the Project submit audited financial statements within 9 months after the end of each fiscal year. Condition and Context: The required REAC submission and annual audit for the fiscal year ended June 30, 2022 were not completed within the required deadline. Cause: Management had difficulty in obtaining all supporting documentation in order to complete the required audit within the timeline prescribed by the Department of Housing and Urban Development. Additionally, current year’s report’s timeliness was affected by prior years untimely report because, the original trial balance had to be sent back to management to correct material misstatements and to complete bookkeeping for the fiscal year. Effect: The Organization is not in full compliance with the requirements prescribed in the Department of Housing and Urban Development Chapter 3 Guidance and its regulatory agreement with HUD. Recommendation: To avoid potential non-compliance, we recommend that management monitor the required timelines for reporting requirements and implement policies with respect to its financial close and reporting process. Management’s Response: Refer to Corrective Action Plan.