Finding Text
S3800-011: Program Information
Federal Program: Mortgage Insurance for Rental and Cooperative Housing Section 221(d)(4)
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.135
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: 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
2022-001 and 2021-001
S3800-020: Criteria
The regulatory agreement requires that the Organization’s books and records are maintained in
accordance with GAAP.
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended February 28, 2023 federal award program,
we noted that management was not reconciling the escrow balances to the general ledger.
Escrow accounts including reserve for replacement did not agree to the lender statement. The
expenses were not capitalized as per the capitalization policy.
S3800-032: Cause
Management was not reconciling general ledger balances to supporting documentation.
Management’s monthly closing process is inadequate.
S3800-033: Effect or Potential Effect
The Organization is not in compliance with requirements to maintain books and records according
to GAAP. 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 auditor’s finding.
S3800-050: Context
Management was not reconciling the financial statements to source documents.
S3800-080: Recommendation
As part of the month-end closing process, management should ensure that the accounts reconcile
to source documents.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Concur
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
September 30, 2023
S3800-150: Response
See Corrective Action Plan