FAC Explorer

Finding 8102 (2023-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-01-10
Audit: 10676
Organization: Realife Cooperative of Coon Rapids (MN)
Auditor: Westberg Eischens Pllp

AI Summary

  • Core Issue: The Cooperative relies on the auditor to prepare its financial statements due to a lack of qualified staff.
  • Impacted Requirements: This situation affects the Cooperative's ability to independently prepare financial statements in line with GAAP.
  • Recommended Follow-Up: The Cooperative should enhance staff training and understanding of GAAP to take more responsibility for financial reporting.

Finding Text

Finding 2023-001 Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing GAAP based financial statements. Repeat Finding: This finding was reported in the prior year as finding 2022-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 26 in this audit report.

Corrective Action Plan

Housing and Urban Development Realife Cooperative of Coon Rapids respectfully submits the following corrective action plan for the year ended October 31, 2023. Westberg Eischens, PLLP 2630 1st Street South P.O. Box 362 Willmar, MN 56201 Audit Period: October 31, 2023 The finding from the October 31, 2023 schedule of findings and questioned costs and the summary schedule of prior audit findings is discussed below. The finding is numbered consistently with the number assigned in the schedules. Summary of audit results does not include findings and is not addressed. Finding 2023-001 Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 584544 2023-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.126 Mortgage Insurance_cooperative Projects $7.30M