Finding 479180 (2023-002)

Planned Corrective Action: While we agree that the submission dates lagged the scheduled dates, we do not agree that this condition rises to the level of a material weakness in internal controls over reporting. BVCOG submitted their audited financial statements for fiscal year 2022 through the Federal Audit Clearinghouse (FAC) on June 30, 2023, which is prior to June 30, 2023. BVCOG awaits receipt of their audited financial fiscal year 2023 in order to submit them to the FAC. The audited fiscal year 2022 financial statements were submitted separately to HUD on November 22, 2023. HUD approved our submission without notice of delay. Unaudited financial statements for the fiscal year ending 2023 were submitted and accepted by HUD, with no point score deduction penalties or requests for corrective action. The timing of HUD’s Real Estate Assessment Center (REAC) report submission depends on acceptance of the previous unaudited or audited financial statements. The REAC submissions require that each year’s unaudited submission be approved by HUD before the audited submission can be submitted; further, both submissions for a year must be accepted by HUD before the next year’s submissions can be completed. Due to various factors including the COVID-19 pandemic and Winter Storm Uri in 2021, the Fiscal Year 2020 unaudited submission process completed April 2022. Subsequent staff turnover delayed the submission of the audited 2020 submission until August 2023. Once that submission was approved by HUD, the 2021 and 2022 submissions were completed by the end of November 2023. BVCOG realizes its REAC submission procedures rely on institutional knowledge and addressed this risk by engaging an outside CPA firm with personnel knowledgeable of the REAC system. This arrangement ensures additional cross-training opportunities in the future for current finance staff such that, if a key staff person leaves, there will be others in the department who know and understand the procedures necessary for compliance with HUD deadlines. Contact Person Responsible for Corrective Action: Janet Dudding, MBA, CPA, CGFO, Director of Finance Anticipated Completion Date: July 2024