Finding 571845 (2024-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-07-23

AI Summary

  • Core Issue: CUCS faced delays in finalizing audit schedules for key areas, impacting the timely completion of financial statements.
  • Impacted Requirements: The delays resulted in non-compliance with 2 CFR Section 200.512(a)(1) regarding timely financial statement finalization.
  • Recommended Follow-Up: Consider enhancing internal processes and support, possibly by retaining external bookkeeping services, to ensure timely completion of audits in the future.

Finding Text

CUCS had delays in producing final audit schedules related to key areas, specifically for revenues and accounts receivable, and expenses and accrued expenses that caused CUCS to re-schedule the audit different times and subsequently delay in the finalization of the audit process and production of financial statements. The Finance Department was in a period of transition, having its Chief Financial Officer and other staff resign during and after the fiscal year end, which contributed to the delays and difficulties in producing final adjusted financial information. As a result, the fiscal year 2024 financial statements were not finalized in time to meet the deadlines noted in 2 CFR Section 200.512(a)(1). In addition, CUCS hired an outside bookkeeping service to help in CUCS's day-to-day operations and perform various analyses in order to complete the audit process and the production of financial statements.

Corrective Action Plan

To: EisnerAmper LLP Date: 7/21/2025 Subject: Response to Management Letter Commend for the Fiscal Year Ended 6/30/2024 Thank you for your management letter dated 6/30/2025 and for your valuable insights and recommendations regarding our financial processes and controls. Areas of improvement identified by the audit team are acknowledged. CUCS is committed to addressing the points raised. For each recommendation we have taken corrective actions as outlined below. Response to comment#1: CUCS experienced delays in producing final audit schedules due to staffing transitions, including the unanticipated resignation of the Chief Financial Officer (CFO) and other key executive members. While various members of the fiscal team are responsible for preparing audit schedules, the CFO has historically overseen the initiation and finalization of the financial statements and served as the primary liaison with EisnerAmper during the audit process. We appreciate the opportunity to respond to the internal control deficiencies identified during your audit for fiscal year 2024. We acknowledge your finding that our current internal control processes may not consistently detect and correct material misstatements in a timely manner. This concern has been noted and taken seriously by management. Corrective Actions: Staffing and Leadership Stabilization • A Part-time Chief Financial Officer Consultant has been hired to provide leadership, oversight, and stability within the Finance Department while CUCS continues to recruit for a permanent CFO. • Internal resources are being strengthened to reduce reliance on external accounting services. Process and Calendar Improvements • An annual financial reporting and audit preparation calendar has been developed and implemented to improve planning and accountability for deliverables. • Key deadlines for closing entries, reconciliations are now documented and monitored quarterly. • Enhance our review procedures by implementing an additional layer of financial oversight. All required financial reports and key reconciliation’s will be conducted monthly. Capacity Building and Training • Cross-training of finance staff is underway to reduce dependency on single individuals and improve team resilience. Monitoring and Follow-Up • Regular updates to the Executive Team and Audit Committee. Response to comment#2: We acknowledge the auditor’s observation regarding the presence of former employees remaining listed as authorized signers on CUCS bank accounts. We agree that maintaining accurate and up-to-date signer authorizations is critical to safeguarding the organization’s financial assets. In response to this finding, CUCS has taken the following corrective actions: Immediate Review and Removal of Former Employees All bank accounts have been reviewed, and individuals who are no longer employed by CUCS have been removed from signer authority. This process was completed promptly upon identification of the issue. Ongoing Monitoring and Annual Review We are instituting an annual review of all authorized bank signers to ensure that records are current and appropriately reflect active personnel with approval authority. This review will be documented and conducted under the direction of the new part-time CFO consultant. CUCS is committed to maintaining effective internal controls over its financial operations, and we appreciate the auditor’s recommendation in helping us strengthen this process.

Categories

No categories assigned yet.

Other Findings in this Audit

  • 571846 2024-001
    Material Weakness
  • 571847 2024-001
    Material Weakness
  • 571848 2024-001
    Material Weakness
  • 571849 2024-001
    Material Weakness
  • 571850 2024-001
    Material Weakness
  • 571851 2024-001
    Material Weakness
  • 571852 2024-001
    Material Weakness
  • 1148287 2024-001
    Material Weakness
  • 1148288 2024-001
    Material Weakness
  • 1148289 2024-001
    Material Weakness
  • 1148290 2024-001
    Material Weakness
  • 1148291 2024-001
    Material Weakness
  • 1148292 2024-001
    Material Weakness
  • 1148293 2024-001
    Material Weakness
  • 1148294 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $11.15M
14.258 Tax Credit Assistance Program (recovery Act Funded) $8.89M
14.267 Continuum of Care Program $1.49M
93.958 Block Grants for Community Mental Health Services $1.39M
14.235 Supportive Housing Program $686,350
14.241 Housing Opportunities for Persons with Aids $527,094
93.150 Projects for Assistance in Transition From Homelessness (path) $193,912