Finding Text
S3800-010: Finding Reference Number 2022-001 Program Information S3800-011: Major Federal Program AL # 14.135: Mortgage Insurance for Rental and Cooperative Housing Section 221(d)(4) Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: N/A Pass-through Entity: None COVID-19 Identification: N/A Type of Compliance Finding: N - Special Tests and Provisions S3800-015: Type of Finding Federal Awards and Financial Reporting Finding S3800-016: Finding Resolution Status In-process S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Repeat Finding Number 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, 2022 federal award program, we noted that management was not reconciling the aged tenant accounts receivable subsidiary ledger to the general ledger. Also, escrow accounts including reserve for replacement were not reconciled to the lender statement. The liabilities were also not accurately recorded at year-end. Management was not able to provide supporting documentation for payroll records. S3800-032: Cause The Organization?s books are maintained in QuickBooks, whereas tenant rental transactions are recorded at a detailed level in a different software and the detail information is not reconciled to the general ledger. Management was not reconciling other 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 agreed with auditor?s finding. S3800-050: Context Management was not reconciling the financial statements to source documents, including reports from the software used to process tenant rental activities and payroll records. S3800-080: Recommendation As part of the month-end closing process, management should ensure that the accounts reconcile to source documents, including reports from the software used to process tenant rental activities and payroll records. 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 September 30, 2022 S3800-150: Response See Corrective Action Plan