Finding Text
2020-017 Misstatements in Financial Statements
Criteria:
A Housing Authority is required to prepare accurate financial statements free from material misstatement.
Condition:
The financial statements for the Fayetteville Housing Authority contain the following misstatements:
The financial activity for the FHA Development, Inc. was included in the Business Activities Project in the FDS submission and in detail accounts of the general ledger. The FHA Development, Inc. Company, Inc. is a 501(3)(c) Not for Profit Corporation and as such, should be presented on the financial statements as a discretely presented component unit. The current accounting and presentation obscure the activity of the FHA Development, Inc. by imbedding it within the financial statements of the Fayetteville Housing Authority, which is misleading.
Questioned Costs:
Unknown
Effect:
The financial statements of the Fayetteville Housing Authority are misstated.
Cause:
Fayetteville Housing Authority management did not properly prepare and submit their unaudited financial statement submission to HUD
Recommendation:
We recommend that the Fayetteville Housing Authority properly prepare their financial statements to present the FHA Development, Inc. as a discretely presented component unit.