Finding Text
Finding No. 2022-003 The Schedule of Expenditures of Federal Awards (SEFA) and the status of prior audit findings and questioned costs were not timely prepared by NWCH staff for the audit. Criteria According to Government Auditing Standards and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) the auditee is responsible for preparation of the SEFA and updating the status of prior audit findings before audit fieldwork begins as stated in the annual audit engagement letter. Condition The SEFA and the status of prior audit findings were provided to the auditor on April 12, 2023, after the HUD audit submission deadline and after the majority of audit procedures were completed. Context The SEFA and the status of prior audit findings were requested in the audit engagement letter and a few additional requests via email and telephone calls during the audit. Cause Lack of familiarity with and understanding of federal single audit requirements and procedures. Effect Late filing of the annual audit with HUD and notification by HUD that this late filing may affect the awarding of future grants and loans to NWCH. Questioned Costs None. Recommendations Rapid growth of NWCH in providing much needed low-income housing on the Oregon coast coupled with difficulty in hiring qualified staff to maintain expanded operations resulted in NWCH being unprepared for the 2022 audit. Seek training on federal single audit requirements, continue to pursue hiring of or contracting with a degreed accountant who can provide oversight of the accounting function, oversee NWCH's audit preparation, and prepare financial statements. Familiarize NWCH staff with federal audit requirements so that adequate preparation of NWCH's accounting system, financial statements, and schedules required for the audit are prepared prior to audit fieldwork including the SEFA and the status of prior audit findings. Continue the search for accounting staff or contracted controller and expand the search to remote workers and professional staffing companies. Views of Responsible Officials and Planned Corrective Actions We agree with this finding and will continue to search for qualified accounting and other personnel necessary to support the continued expansion of NWCH. Training in federal single audit and HUD audit requirements will be obtained. NWCH is currently experiencing growing pains but management is determined to continue expanding, obtaining, and operating additional properties needed for housing low-income, homeless, and other qualifying individuals.