Finding 584504 (2023-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-01-10
Audit: 10578
Organization: Wilmington Housing Authority (DE)
Auditor: Sb & Company LLC

AI Summary

  • Core Issue: A $2.4 million loan receivable and revenue were not recorded, leading to an understatement of total assets and revenue for fiscal year 2022.
  • Impacted Requirements: The Authority failed to maintain adequate internal controls over financial reporting, violating generally accepted accounting principles.
  • Recommended Follow-Up: Implement regular meetings among department directors to improve communication and ensure timely recording of financial transactions.

Finding Text

Finding 2023-001 Programs: All Material Weakness over Financial Reporting Repeat Finding: No Condition: The Authority did not record a transaction in the amount of $2.4 million during the year ended March 31, 2022 to record a loan receivable and revenue associated with a funding transaction. As a result, total assets and revenue were understated in fiscal year 2022, and the beginning net position as of April 1, 2022 needed to be restated in the fiscal year 2023 financial statements to record the transaction. Criteria: Entities must maintain an adequate system of internal controls over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Cause: There was inadequate interdepartmental communication within the Authority. Information regarding this transaction was not properly communicated throughout all necessary departments of the Authority. Effect: Total assets and revenue were understated in fiscal year 2022, and the beginning net position as of April 1, 2022 needed to be restated in the fiscal year 2023 financial statements to record the transaction. Questioned Costs: None. Recommendation: We recommend that this issue of lack of communication be investigated and that a solution be implemented as soon as possible. We recommend a regularly scheduled meeting of all department directors to discuss and review the recent and upcoming events in their respective areas to allow for a better flow of information between each department. Management’s Response and Corrective Action Plan Management agrees with the finding. See Schedule of Corrective Action Plan.

Categories

Material Weakness Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 8054 2023-001
    Material Weakness
  • 8055 2023-001
    Material Weakness
  • 8056 2023-001
    Material Weakness
  • 8057 2023-001
    Material Weakness
  • 8058 2023-001
    Material Weakness
  • 8059 2023-001
    Material Weakness
  • 8060 2023-001
    Material Weakness
  • 8061 2023-001
    Material Weakness
  • 8062 2023-001
    Material Weakness
  • 584496 2023-001
    Material Weakness
  • 584497 2023-001
    Material Weakness
  • 584498 2023-001
    Material Weakness
  • 584499 2023-001
    Material Weakness
  • 584500 2023-001
    Material Weakness
  • 584501 2023-001
    Material Weakness
  • 584502 2023-001
    Material Weakness
  • 584503 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $20.23M
14.850 Public and Indian Housing $8.81M
14.872 Public Housing Capital Fund $5.92M
14.879 Mainstream Vouchers $1.61M
17.274 Youthbuild $274,707
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $220,384
14.896 Family Self-Sufficiency Program $217,768
14.U01 Emergency Housing Vouchers $187,002
14.870 Resident Opportunity and Supportive Services - Service Coordinators $65,912