Finding 520582 (2023-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2025-01-28
Audit: 340189
Organization: Centennial Square (MN)

AI Summary

  • Core Issue: Centennial Square lacks a policy ensuring financial statements comply with U.S. GAAP, increasing the risk of misstatements.
  • Impacted Requirements: Internal controls are necessary to provide reasonable assurance that financial statements are accurate and reliable.
  • Recommended Follow-up: Evaluate and strengthen financial reporting processes and controls to ensure compliance with U.S. GAAP.

Finding Text

Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition: Centennial Square does not have a policy in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the project’s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that management does not have internal controls in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of controls in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: Centennial Square has not adopted a policy to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP; however, management has reviewed and approved the annual financial statements and related notes, as prepared by CliftonLarsonAllen, and has accepted responsibility for those financial statements. Recommendation: Centennial Square should evaluate their financial reporting processes and controls, including the expertise of its internal staff, to determine whether additional controls over the preparation of annual financial statements can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management will continue to rely on CliftonLarsonAllen to draft the financial statements and the related notes to the financial statements, and will review, approve, and accept responsibility for the annual financial statements prior to their issuance.

Corrective Action Plan

Management will continue to rely on CliftonLarsonAllen to draft the financial statements and the related notes to the financial statements, and will review, approve, and accept responsibility for the annual financial statements prior to their issuance.

Categories

Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 520583 2023-001
    Material Weakness Repeat
  • 1097024 2023-001
    Material Weakness Repeat
  • 1097025 2023-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $2.48M
14.195 Section 8 Housing Assistance Payments Program $63,954