Finding 32714 (2022-002)

Significant Deficiency Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2022-11-14

Audit: 27142

Organization: Mountain View Housing, INC (NC)

Auditor: Ray Bumgarner Kingshill @ Assoc P A

AI Summary

Core Issue: Inadequate segregation of duties due to limited staff increases the risk of fund misappropriation.
Impacted Requirements: No single employee should handle all aspects of transaction management (performing, recording, reconciling).
Recommended Follow-Up: The Board should regularly approve expenditures, sign checks, and review financial statements to mitigate risks.

Finding Text

Finding 2022-002 Segregation of Duties Rural Rental Housing Loan Program Cluster: Rural Rental Housing Loans, CFDA #10.415 ? Year ended August 31, 2022 Rural Rental Housing Payments, CFDA #10.427 ? Year ended August 31, 2022 Condition: Due to the size of the organization, there are not enough employees to adequately segregate incompatible duties. Criteria: No individual should have access to the performing, recording and reconciling of any one type of transaction. Effect: Because of the lack of segregation of duties, it is possible for an employee to misappropriate funds and conceal the transaction. Cause: Organizational limitations do not allow the hiring of additional employees. Auditor?s Recommendation: Because it is neither practical nor cost-efficient to have additional employees, the Board should continue to approve expenditures, sign checks, and periodically review the financial statements. Grantee Response: We concur with the recommendation.

Corrective Action Plan

Significant Deficiencies: Finding: 2022-001 Segregation of Duties Name of Contact Person: Wendy Duckett, Housing Director Corrective Action: The duties will be separated as much as possible and alternative controls will be used to compensate for lack of separation. The governing board will continue to approve and sign checks and periodically review the financial statements. Proposed Completion Date: The Board will implement the above procedure immediately. Findings and Questioned Costs - Major Federal Awards Programs Audit Finding: 2022-002 Segregation of Duties Same as above.

Other Findings in this Audit

32715 2022-002

Significant Deficiency Repeat
609156 2022-002

Significant Deficiency Repeat
609157 2022-002

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.415	Rural Rental Housing Loans	$3.27M
14.195	Section 8 Housing Assistance Payments Program	$242,834
10.427	Rural Rental Assistance Payments	$100,712