Finding 514111 (2023-002)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-12-12

AI Summary

  • Core Issue: The Organization failed to submit the 2023 Single Audit Reporting Package and HUD REAC Annual Financial Statement on time.
  • Impacted Requirements: Timely submission is required by Uniform Guidance (30 days post-audit report or 9 months after fiscal year-end) and HUD (due by September 30).
  • Recommended Follow-up: Implement a compliance deadline schedule to prevent future delays, especially during management transitions.

Finding Text

Reporting – Late submission of the Single Audit Reporting Package and Data Collection Form to the Federal Audit Clearinghouse (FAC) Federal Agency Program Title Assistance Listing Number Award Number Award Period All awards reported on the schedule of expenditures of federal awards Identification as a Repeat Finding: N/A Finding: The Organization did not file its annual 2023 Single Audit and Data Collection form timely. The Organization did not file its HUD REAC Annual Financial Statement timely. Criteria: The Single Audit Reporting Package and Data Collection Form shall be submitted to the Federal Audit Clearinghouse 30 days after receipt of the auditor’s report, or 9 months after the end of the fiscal year, whichever comes first. The HUD REAC AFS is due by September 30. Condition and context: Submission of the Single Audit Reporting Package and Data Collection Form to the FAC was not completed within the timeframe required by the Uniform Guidance. The HUD REAC Annual Financial Statement was not completed or submitted by September 30 as required. We note that the Single Audit Reporting Package, Data Collection Form and HUD REAC AFS are expected to be submitted during December 2024 for the fiscal year ended December 31, 2023. Cause: The Organization changed to a new property management company during 2023. The transition did not go smoothly and the new management agent has had problems transitioning the accounting from the prior management agent which has hindered the completion and filing reports in timely manner. Sample size and population: Sampling was not applicable to this finding. Effect: Noncompliance with the Uniform Guidance and HUD could impact future funding from Federal sources. Recommendation: Changes to the property management company happens infrequently. Therefore, it would be unusual for a similar matter to reoccur; however, it is considered a best practice to maintain a schedule of regulatory and compliance deadlines to ensure related tasks are completed in advance of deadlines. Also, see recommendation in Finding 2023-001. Question Costs: None Views of Management and Corrective Action Plan: Management’s response is reported in the “Corrective Action Plan” Contact Person: Mauro Hernandez

Corrective Action Plan

Finding: The Organization did not file its annual 2023 Single Audit and Data Collection form timely. The Organization did not file its HUD REAC Annual Financial Statement timely. Views of Management and Corrective Action Plan: The updated onboarding procedures listed in Finding II Corrective Action are designed to prevent delays in submitting required audit reporting. Key improvements include: 1. Timely Reporting Compliance: o Enhanced onboarding processes eliminate the factors that previously led to late audit submissions. 2. Accurate Financials: o Financial statements submitted to auditors will be complete and accurate, minimizing the need for corrections. 3. Proactive Issue Resolution: o By addressing reporting requirements early in the onboarding process, the likelihood of errors and delays is significantly reduced. These updates ensure that future audit reporting deadlines are consistently met, avoiding the challenges faced in the current year.

Categories

Reporting HUD Housing Programs

Other Findings in this Audit

  • 514112 2023-003
    Material Weakness
  • 1090553 2023-002
    Material Weakness
  • 1090554 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.129 Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $2.68M