Finding Text
2022-005–INSUFFICIENT AUDIT EVIDENCE
Federal Agency: All presented in the Schedule of Expenditures of Federal Awards (SEFA).
Federal Program Name: All presented in the SEFA.
Assistance Listing Number: All presented in SEFA.
Federal Award Identification Number and Year: All presented in SEFA.
Award Period: N/A
Questioned Costs: None
Estimated Questioned Costs: Unknown
Type of Finding
• (A) Material Weakness in Internal Control Over Financial Reporting
• (D) Material Weakness in Internal Control Over Compliance of Federal Awards
• (F) Instance of Noncompliance related to Federal Awards
Statement of Condition
During our audit, we were unable to obtain sufficient appropriate audit evidence to conclude the financial statements as a whole, are free from material misstatement. The following are key areas in which audit evidence was deemed insufficient:
• Receivables, mortgage loan receivables, development costs, land trust assets, liabilities, donor restricted net assts, revenues and expenditures and the schedule of expenditures of federal awards
Criteria
AU-C Section 705 Modifications to the Opinion in the Independent Auditor’s Report addresses the auditor’s responsibility to issue an appropriate report in circumstances when, in forming an opinion in accordance with section 700, Forming an Opinion and Reporting on Financial Statement.
Cause
the Housing Trust has undergone significant turnover during the year ended December 31, 2022, which has in turn caused the organization to lose institutional knowledge.
Effect
The possible effects of this inability to obtain sufficient appropriate audit evidence are deemed to be both material and pervasive to the financial statements and on compliance for each major federal program and on internal control over compliance required by the uniform guidance. Accordingly, the auditor’s reports both contain disclaimers of opinions.
Recommendation
We recommend Housing Trust maintain accurate and timely information in order to be ready for its annual audit.
View of Responsible Officials and Corrective Action Plan
Agreed. Where feasible, the Housing Trust will aim to improve management of all financial and non-financial data. A thorough review of the current policies and procedures will be conducted to identify new or updated processes that need to be changed. The bank reconciliations, monthly closings of the books, and thorough review of the financial reports will be done monthly. Staff changes have taken place to allow additional time for the Business Operations Manager to conduct these reviews. Consultations with an external accountant will be completed monthly to ensure the processes are correct.
Corrective Action Plan Timeline:
Immediately
Designation Of Employee Position Responsible For Meeting Deadline:
Business Operations Manager