Finding 611919 (2022-002)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-01-04

AI Summary

  • Core Issue: The Project relies on external auditors for financial statement preparation, which undermines its internal control system.
  • Impacted Requirements: Financial statements must be prepared in line with GAAP to ensure accuracy and completeness.
  • Recommended Follow-Up: Implement a comprehensive review procedure for financial statements, ideally conducted by someone knowledgeable in GAAP and the Project's operations.

Finding Text

Finding No. 2022-002 ? Preparation of Financial Statements Condition: As part of the audit, adjustments were made to properly record fixed asset additions and depreciation. The Project also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of The Project?s internal control system. Criteria: A strong system of internal controls requires the Project to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America. Cause: The Project engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Project would require the employment of additional personnel. Consequently, corrective action may not be practical. Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures. Repeat Finding: Yes, prior year finding 2021-002 Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Project should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Project?s activities and operations. Views of responsible officials and planned corrective actions: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 35476 2022-001
    Material Weakness Repeat
  • 35477 2022-002
    Material Weakness Repeat
  • 35478 2022-001
    Material Weakness Repeat
  • 35479 2022-002
    Material Weakness Repeat
  • 611918 2022-001
    Material Weakness Repeat
  • 611920 2022-001
    Material Weakness Repeat
  • 611921 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $390,115
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $389,534