Finding 503594 (2023-001)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-10-24

AI Summary

  • Core Issue: The Company failed to submit financial reports on time, violating the HUD Regulatory Agreement.
  • Impacted Requirements: Reports must be filed within 90 days after the fiscal year ends, following generally accepted accounting principles.
  • Recommended Follow-Up: Management should establish stronger controls over financial reporting to ensure timely submissions in the future.

Finding Text

**Criteria: In accordance with the HUD Regulatory Agreement, the property is required to submit a financial report in accordance with accounting principles generally accepted in the United States of America within 90 days following the end of the fiscal year. **Condition: The Company did not issue required financial reports within the deadline. **Cause: Management was unaware of the filing requirements due to significant turnover in key positions. In addition, due to the significant turnover, the monthly reporting and closing cycle did not function properly to ensure account balances were reconciled timely and accurately. **Effect or potential effect: The Company is not in compliance with the HUD Regulatory Agreement. **Recommendation: Management should implement controls over financial reporting to ensure reports are filed in a timely manner. **Perspective: N/A **Questioned costs: N/A **Views of responsible officials: Auditee agrees with auditor finding and has implemented controls to ensure financial reports are submitted in accordance with the HUD Regulatory Agreement. **Auditor’s evaluation of the views of responsible officials: Management’s response is appropriate to address the noncompliance that occurred.

Corrective Action Plan

The auditee will ensure financial records are finalized and submitted in accordance with the HUD Regulatory Agreement.

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

  • 1080036 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $6.02M