Finding Text
Finding Name: Timeliness of Accounting Close and Financial Reporting and Federal Audit Submission
Federal Award(s): ALN 14.871/14.879 – U.S. Department of Housing and Urban Development – Housing Voucher Cluster
ALN 14.872 – U.S. Department of Housing and Urban Development – Public Housing Capital Funds
Finding: Internal control processes over financial reporting did not ensure that the financial statements as of and for the fiscal year-ended June 30, 2023, or the related supporting accounting records, were completed timely, which prevented timely submission of the audit to the Federal Audit Clearinghouse.
Repeat Finding: Not applicable - this is not considered a repeat finding.
Criteria: The Authority is responsible for preparation of accurate and complete financial statements and related supporting documentation to its auditors in a timely manner in order to facilitate meeting all audit reporting deadlines. The U.S. Department of Housing and Urban Development and the Federal Audit Clearinghouse each require annual submission of an audit no later than nine months after the Authority’s fiscal year end.
Condition and Context: While management was aware of the Federal Audit Clearinghouse deadlines, the draft financial statements and certain supporting accounting records were not provided to the auditors in a timely manner, with some records and draft financial statements and notes provided more than 8 months after the fiscal year-end. Delays were caused by an Authority-wide accounting system conversion, transitions in key management roles, and a lack of available time to prepare for the audit.
Cause: The internal controls of the accounting and reporting system were not effectively operating such that the preparation of accounting records and draft financial statements could be completed timely for submission to the Federal Audit Clearinghouse or for internal use.
Effect: The submission of audited financial statements to the federal audit clearinghouse was late, which could result in reductions or delays in federal assistance provided to the Authority. Additionally, the Board of Directors and other users of the financial statements rely on timely and complete reports for decision making, and delays in these reports could impact their ability to govern the Authority effectively.
Questioned Costs: None.
Recommendations: We recommend the Authority develop a process or procedure to ensure the preparation year-end financial records and draft financial statements is completed timely to allow sufficient time for the audit of such information to occur prior to all deadlines for audit submission.
Views of Management and Corrective Action Plan: Management’s response is reported in the “Management’s Corrective Action Plan” at the end of this report.
Contact Person: Hermelinda Sierra, CFO/Deputy Director