Finding 497304 (2023-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-18

Audit: 319953

Organization: United Auto Workers Senior Citizens' Center Inc. (IL)

Auditor: Cliftonlarsonallen LLP

AI Summary

Core Issue: The Center relies on an external firm for financial statement preparation, which compromises internal control over compliance.
Impacted Requirements: Internal controls must ensure financial statements are prepared independently to meet U.S. accounting standards.
Recommended Follow-Up: Management should assess internal staff capacity to improve financial reporting controls, despite operational constraints.

Finding Text

Finding No. 2023-001 – Segregation of Duties Type of Finding: Material Weakness in Internal Control Over Compliance. Assistance Listing #: 14.327 Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 8 - Lower Income Housing Assistance Program Condition: The Center engages CliftonLarsonAllen to assist in preparing its financial statements and accompanying disclosures. Criteria: A strong system of internal controls requires the Center to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Cause: The Center engages CliftonLarsonAllen to assist in this process. However, the Center has reviewed and approved the annual financial statements and the related disclosures. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Repeat Finding: Yes, prior year finding 2022-002. Recommendation: Management should continue to evaluate their internal staff capacity to determine if an internal control policy over the annual financial reporting is beneficial. Views of Responsible Officials and Planned Corrective Actions: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical. Questioned Costs: None

Corrective Action Plan

U.S. Department of Housing and Urban Development United Auto Workers Senior Citizens' Center, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2023. Audit period: January 1, 2023 - December 31, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Recommendation: When this condition exists, management’s and the board’s close supervision and review of accounting information is the best means of preventing or detecting errors and fraud. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: We agree and will continue to monitor financial results and accounting information as hiring additional employees is not practical. Name(s) of the contact person(s) responsible for corrective action: Donald Bly Planned completion date for corrective action plan: In process If the U.S. Department of Housing and Urban Development has questions regarding this plan, please call Donald Bly at 309-347-7791.

Other Findings in this Audit

1073746 2023-001

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
14.327	Performance Based Contract Administrator Program	$1.17M