Finding Text
FINDING #2021-002 RECORD KEEPING FOR NEW CONSTRUCTION
Type of Finding: Financial
Program: The Federal Program is HOME Investment Partnership Program (Assistance Listing 14.239) issued by the U.S. Department of Housing and Urban Development passed through to Louisiana Housing Finance Agency.
Condition: The sponsoring agent did not inform the managing agent, who is in control of the books and records, that there was a separate construction account, which was maintained by the sponsor.
Criteria: The managing agent, or the individual responsible for financial record keeping should be informed of all cash accounts, in order to maintain accurate records.
Effect: A prior period adjustment, in the amount of $110,989, was made to record the partial forgiveness of a loan. A corresponding increase in assets and liabilities, in the amount of $198,994, was also recorded to reflect activity in the account.
Cause: The sponsor was not aware of their responsibility to inform the managing agent about this account.
Recommendation: We recommend that the entity develop internal controls that will prevent this occurrence in the future.
Views of Responsible Officials and Planned Corrective Action: Management will adopt controls to prevent this in the future.