2022-001 - Inadequate Controls Over Financial Reporting Public and Indian Housing Program ? CFDA 14.850 Material Weakness in Internal Control, Material Noncompliance Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Action Taken: During fiscal year 2022, the Authority hired an outside CPA firm to assist with the financial statements for the Public and Indian Housing Program and Section 8 Housing Choice Voucher Program. Although the finding continues in the current year, the Authority has made great strides to clean up the financial statements of the programs mentioned, reducing the material adjustment effect on equity by 61% from the prior period. The Authority will continue to improve efficiency and procedures/workpapers to ensure the year-end closing procedures become more effective and reliable in the coming years.