Finding Text
Finding 2020-001: Inadequate Controls over Financial Reporting (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Reporting
Criteria: The Commission should maintain appropriate controls over the financial reporting process to
prevent or detect material misstatements.
Condition: The Commission did not have adequate controls over the financial reporting process and, as
a result, material restatement adjustments related to the prior year were required.
Context: The Commission identified prior-period errors in financial reporting during the audit process
for the year ended December 31, 2020. The prior period errors resulted in the restatement of the
opening balances in the financial statements for the year ended December 31, 2020, and therefore,
inaccurate reporting to the financial statement users.
Effect: The Authority recorded adjustments for the corrections of errors related to removal of a loan of
$100,000, the placement in service of two development projects totaling $379,086 and the related
recording of accumulated depreciation of $22,422, and the inclusion of a discretely presented
component unit previously omitted from financial reporting. These adjustments resulted in an increase
to beginning net position of $77,578 and the presentation of the discretely presented component unit's
opening net position of $(340,064).
Cause: The Commission did not have the appropriate controls over the financial reporting process to
prevent or detect material misstatements.
Repeat Finding: This is a repeat of Finding 2019-001.
Questioned Costs: None.
Auditor's Recommendation: The Commission should review and enhance its internal controls, policies
and procedures to ensure that year-end adjustments and reconciliations are performed in a timely and
accurate manner.
Views of Responsible Officials: The Commission will review and enhance our policies and procedures
over year end close, to ensure all adjustments are made timely. In addition, we create policy and
procedures to perform an assessment for component unit determination of any new legally separate
organization that is established.