Finding Text
2024-002 Consolidating All Subsidiaries
Criteria: All subsidiaries should be accounted for in the consolidated financial statements.
Condition: Englewood Family Homes LLC was not included in the consolidated financial statements for the year ended June 30, 2023.
Context: On July 27, 2022, Englewood Family Homes LLC, a subsidiary of Chicago House and Social Service Agency, purchased an apartment building and entered into several loans to rehabilitate the building. Rehabilitation was still ongoing at June 30, 2023.
Effect: The financial statements for Chicago House and Social Service Agency and Subsidiaries were not complete.
Cause: The creation of Englewood Family Homes LLC, the purchase of the building, and the subsequent rehabilitation began in July 2022 and was not completed as of June 30, 2023. Although thorough financial records were being kept on the progress of the rehabilitation, due to an oversight by management because of the ongoing nature of the rehabilitation, the Englewood Family Homes LLC financials were not included in the consolidated financial statements of Chicago House and Social Service Agency.
Recommendation: The financial statements of Englewood Family Homes LLC should be included in the consolidated financial statements of Chicago House and Social Service Agency moving forward. Controls should be implemented to assure any new subsidiaries of the Organization should be included in the consolidated financial statements.
Response: Management agrees with the finding.
Actions Taken or Planned on the Finding: Management has addressed and implemented internal controls to assure all subsidiaries are recorded on the consolidated financial statements. The financial statements for the year ended June 30, 2023 have been restated to include Englewood Family Homes LLC. This finding is closed.