Finding Text
Finding reference number: 2020-005
Assistance Listing title and number (Federal award identification number and year): Section 8 new construction and substantial rehabilitation Assistance Listing No. 14.182 (NJ39H085044 and 1979)
Auditor non-compliance code: Z - Other
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: No
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of Condition 2020-005 (Assistance Listing No. 14.182): The Corporation's books and records were not maintained in reasonable condition for proper audit as required by HUD.
Criteria: The books and records of the Corporation are required to be kept in accordance with HUD Financial Operations and Accounting Procedures for Insured Handbook (4370.2) Chapter 2: Financial Operations and Accounting (Section 2-3 Maintenance of Books and Records), which requires the records be maintained in reasonable condition for proper audit which includes adequate design and monitoring of controls to safeguard the entity's assets.
Effect: The Corporation is not in compliance with HUD regulations.
Cause: As a result of the change in management agent and the former management agent's inability or refusal to provide access to all relevant finance and accounting materials, we were unable to obtain appropriate audit evidence that the financial statements referred to in the first paragraph were reported in accordance with accounting principles generally accepted in the United States of America, and we were unable to satisfy ourselves by other auditing procedures.
Recommendation: The Board of Directors should ensure the books and records are maintained in reasonable condition for proper audit as required by HUD.
Completion date: December 31, 2020
Management Response: Agree. The management agent will ensure the books and records are maintained in reasonable condition for proper audits as required by HUD going forward.