Finding 538982 (2023-001)

S3800-010: Finding Reference Number 2023-001 (Material Weakness) S3800-011: Program Information Federal Program: Rural Rental Housing Loans (Section 515) Federal Agency: Department of Agriculture (USDA) Assistance Listing #: 10.415 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: A/B - Activities Allowed or Unallowed and Allowable Costs/Cost Principles and N - Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria The regulatory agreement requires that the Organization’s books and records are maintained in accordance with USDA guidelines and generally accepted accounting principles (GAAP). S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended December 31, 2023 financial statements and federal award program, we noted the Organization’s books are not maintained in accordance with GAAP. Several misstatements were identified by the auditor in the unaudited financial statements and accounts of the Organization. We noted that the beginning net assets did not agree with the prior year net assets. We also note that several accounts including mortgage interest and mortgage balance did not agree to supporting documentation. We proposed adjusting entries including a prior period adjustment to correct those accounts, which were accepted by management. S3800-032: Cause The Organization lacks adequate internal controls to ensure that books and records are kept accurately and completely.S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement requirement to maintain accurate and complete books and accounts. S3800-035: Auditor Non-Compliance Code S – Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to maintain books and records in accordance with USDA guidelines and GAAP. S3800-080: Recommendation The Organization should follow their policies and procedures to ensure that accounting records are kept accurate and complete, and a responsible official should review and sign off on the monthly financial statements. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2024 S3800-150: Response See Corrective Action Plan