FAC Explorer

Finding 509651 (2022-001)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2024-11-21
Audit: 329287
Organization: St. Ambrose Housing Aid Center, Inc. (MD)
Auditor: Sb & Company LLC

AI Summary

  • Core Issue: St. Ambrose Housing Aid Center delayed its 2022 financial audit, completing it in May 2023, which is past the regulatory deadline.
  • Impacted Requirements: The Organization failed to maintain adequate internal controls over financial reporting, leading to untimely closure of financial records.
  • Recommended Follow-Up: Implement procedures for timely closing of fiscal year activities and ensure proper documentation is readily available for audits.

Finding Text

Significant Deficiency over Financial Reporting and Noncompliance over Financial Reporting Repeat Finding: Yes Condition: For the year ended June 30, 2022, St. Ambrose Housing Aid Center, Inc. (the Organization) did not complete the 2022 financial statement audit until May 2023. Also, due to turnover within the Organization, it took an extended amount of time to gather the required documents and support for the audit. Thus, the reporting package was not submitted to the Federal clearing house until after the regulatory deadline of March 31, 2023. Criteria: The Organization is responsible for maintaining an adequate system of internal controls over financial reporting in order to initiate, authorize, record and process and report financial data reliably in accordance with generally accepted accounting principles in the United States of America. Cause: The Organization did not have the June 30, 2022, financial records closed timely in order to meet the deadline. Effect: The Organization’s 2022 audit was not completed timely, thus increased risk of error due to unreconciled accounts in a timely manner. Questioned Costs: None. Recommendation: We recommend that the Organization implement procedures to ensure the Organization’s activity is closed timely for the fiscal year and ensure proper documentation is maintained and available for audit. Auditee’s Response and Corrective Action Plan: Management agrees with the finding. Refer to Section V: Corrective Action Plan for management’s approach to correct the finding.

Corrective Action Plan

On March 3rd, 2022, three months prior to the end of the St. Ambrose Housing Aid Center's fiscal year, management was notified by the previous auditors that their firm was discontinuing its audit practice and is discontinuing this line of business for all its clients. This news was totally unexpected. Following this surprise announcement, management initiated a search for a new audit firm with the skills and experience to accurately review the books and records of a large nonprofit organization with diverse real property assets. Management ultimately identified and engaged SB & Company, LLC in August of 2022 to perform all audits of St. Ambrose Housing Aid Center, Inc., and subsidiaries. An additional challenge occurred when our CFO, who worked for the organization for eight years, submitted her resignation in July 2023. While we were pleased for the growth opportunity for our colleague, her departure left the organization in a tenuous position. Finding a replacement has been difficult, we have engaged a search firm, but it has been difficult to find someone with the required skillset who would accept our compensation package. The late notification of the previous auditor and the time-intensive process for identifying and engaging a new firm meant that St. Ambrose Housing Aid Center, Inc. would not be able to deliver a timely audit. Management acknowledges that it is the responsibility of the Company to maintain an adequate system of internal controls over the financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles in the United States of America. Management maintains its books and records using an adequate system of internal controls currently. While our circumstances have been difficult, we have discussed a schedule with our auditor that we believe will allow the audit to be performed to improve our delivery for the year ending June 30, 2024. Contact Person: Gerard Joab Anticipated Implementation Date: December 1, 2024

Categories

Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 509652 2022-001
    Significant Deficiency
  • 509653 2022-001
    Significant Deficiency
  • 509654 2022-001
    Significant Deficiency
  • 509655 2022-001
    Significant Deficiency
  • 509656 2022-001
    Significant Deficiency
  • 509657 2022-001
    Significant Deficiency
  • 509658 2022-001
    Significant Deficiency
  • 1086093 2022-001
    Significant Deficiency
  • 1086094 2022-001
    Significant Deficiency
  • 1086095 2022-001
    Significant Deficiency
  • 1086096 2022-001
    Significant Deficiency
  • 1086097 2022-001
    Significant Deficiency
  • 1086098 2022-001
    Significant Deficiency
  • 1086099 2022-001
    Significant Deficiency
  • 1086100 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.218 Baltimore City, Community Development Block Grant $345,479
21.116 Fy2022 Appropriation $260,000
14.267 Continuum of Care Grant - Baltimore City $222,090
14.267 Supportive Housing and Shelter Care Program $188,582
14.311 Single Family Property Disposition $170,500
14.195 Assistance Payments Moderate Rehabiliation Program $137,372
14.218 Baltimore County, Community Development Block Grant $44,220
93.044 Federal Older Americans Act, Title III $8,500