Finding 35176 (2022-002)

Significant Deficiency

Requirement

Questioned Costs

Year

2022

Accepted

2023-03-15

Audit: 24582

Organization: Kildahl Park Pointe Cooperative (MN)

Auditor: Westberg Eischens Pllp

AI Summary

Core Issue: The Cooperative lacks the staff and resources to prepare its own GAAP-compliant financial statements.
Impacted Requirements: Internal controls related to financial reporting are not being met due to reliance on external auditors for adjustments and preparation.
Recommended Follow-Up: The Cooperative should continue reviewing auditor-prepared statements to ensure understanding and acceptance of responsibility for GAAP compliance.

Finding Text

Finding 2022-002 Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative?s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative?s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative is unable to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 30-31 in this audit report.

Corrective Action Plan

Housing and Urban Development Kildahl Park Pointe Cooperative respectfully submits the following corrective action plan for the year ended December 31, 2022. Westberg Eischens, PLLP 2630 1st Street South P.O. Box 362 Willmar, MN 56201 Audit Period: December 31, 2022 The findings from the December 31, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Summary of audit results does not include findings and is not addressed. Finding 2022-002 Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Planned Completion Date: Not Applicable.

Other Findings in this Audit

35175 2022-001

Significant Deficiency
35177 2022-003

Significant Deficiency
611617 2022-001

Significant Deficiency
611618 2022-002

Significant Deficiency
611619 2022-003

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.126	Mortgage Insurance_cooperative Projects	$6.52M