Finding Text
See Schedule of Findings and Questioned Costs for chart/table Identification as a Repeat Finding: Elements of this finding are a repeat of Finding 2021-001. Finding: Internal control procedures over financial reporting were not performed consistently throughout the fiscal year to ensure accuracy in accounting for revenue and related accounts. Criteria: Consistent performance of internal controls is essential to an Organization?s operations. Sample Size and Population: N/A Condition and Context: The Organization was advanced federal Homeownership Assistance Funds under a contract that contained right of return language. The value of the advances was recorded as revenue rather than the value earned under the contract through the use of funds provided to program beneficiaries in 2022. Effect: As a result, more revenue was recognized in 2022 than was earned and the $213,661 liability for the return of unexpended funds was not recorded as of December 31, 2022. When errors in the performance of internal controls occur, the Organization is subject to the risk that management may use inaccurate financial information in decision making. Cause: HomeSight experienced finance and accounting staff turnover in early 2022. Gaps in staffing resulted in a lack of documentation and communication of accounting treatment for contracts as the Organization did not have a central repository for this information to guide new staff. Recommendation: We recommend the Organization maintain current, written documentation of accounting policies and procedures for new staff to reference for training purposes and establish a central repository for grant contracts can enable staff to easily access contracts, contract terms, and decisions made regarding accounting treatment. Questioned Costs: None Management Response: Management response is reported in the ?Corrective Action Plan? at the end of this report. Contact Person: Tammie Anders, Director of Finance