Finding 369513 (2023-003)

Federal Program Affected: U.S. Department of Housing and Urban Development Home Investment Partnerships Program ALN 14.239 Compliance Requirement: All applicable requirements Questioned Costs: N/A Condition and Cause: During the course of our engagement, we found monitoring of the financial statements and internal controls has not been fully implemented in regard to Heartland Heights LP, Heartland Heights LLC, Heartland Heights LP2, and Heartland Heights LLC 2. We also noted approval documentation was not maintained for several internal control processes. Criteria and Effect: It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the Organization’s management. Repeat Finding From Prior Year: No Recommendation: Management should receive and review regular financial statement activity and determine reasonableness based on knowledge of activities and expectations developed. This should include monitoring compliance with tax credits. In addition, with apartment operations starting in late FY22, internal controls should be assessed to determine proper segregation of duties is occurring and that accounts are properly reconciled (e.g. tenant receivables and security deposits). Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.