Finding 33227 (2022-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2022-12-30

Audit: 29511

Organization: Housing Authority of City of Borger (TX)

Auditor: David A Boring CPA

AI Summary

Core Issue: The Authority has a material weakness in internal controls over financial reporting, leading to improper recording of fixed assets.
Impacted Requirements: Fixed assets must be accurately recorded and reported; errors include adding disposed assets and deleting in-service assets.
Recommended Follow-Up: Collaborate with the fee accountant to ensure correct recording of fixed assets and expenses moving forward.

Finding Text

SECTION II ? FINDINGS RELATED TO FINANCIAL STATEMENTS Finding 2022-001 ? Internal Control over Financial Reporting Material Weakness Criteria: The Authority must properly record and report all fixed assets and net fixed assets. Condition: During testing, inquiry, and observation, we noted the Authority changed fee accountants during the year. During the conversion the authority added material fixed assets to the financial statements for assets that had been removed from service and disposed of in the prior year. The authority also inappropriately deleted a material fixed asset that was still in service. Additionally unsubstantiated prior period adjustments were made to fixed assets. The authority did not properly capitalize material purchases of capital equipment during the year. Cause and Effect: The Authority improperly recorded material fixed assets which resulted in the material overstatement of fixed assets and overstatement of maintenance expenses during the year. Recommendation: The Authority needs to work with the fee accountant to ensure the proper recording of fixed assets and expenses. View of Responsible Officials and Planned Corrective Action: We will work with our fee accountant to ensure our that fixed assets and expenses are appropriately recorded. Responsible Official: Cristi Lajeunesse, Executive Director

Corrective Action Plan

CORRECTIVE ACTION PLAN 2 CFR ? 200.511(c) December 30, 2022 U.S. Department of Housing and Urban Development The Housing Authority of the City of Borger, Texas respectfully submits the following corrective action plan for the year ending March 31, 2022. David A. Boring, CPA 6911 68th Street Lubbock, TX 79424 Audit Period: April 1, 2021 ? March 31, 2022 The findings from the March 31, 2022 schedule of findings and questioned cost are referenced below. The findings are numbered consistently with the numbers assigned in the schedule. Finding Number Planned Corrective Action Anticipated Completion Date Responsible Contact Person 2022-001 We are working with our fee accountant to ensure our that fixed assets and expenses are appropriately recorded. 12/30/2022 Cristi LaJeunesse, Executive Director If the Department of Housing and Urban Development has questions regarding this plan, please call Cristi LaJeunesse, Executive Director at (830) 583-2321. Sincerely yours, Cristi LaJeunesse, Executive Director

Other Findings in this Audit

609669 2022-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
14.872	Public Housing Capital Fund	$1.05M
14.850	Public and Indian Housing	$724,016