Finding Text
Questioned Costs: N/A
Condition: Complete and reconciled financials were not available within a reasonable period after the fiscal year end.
Criteria: A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of HIP Housing Development Corporation and Subsidiaries’ financial statements will not be prevented, or detected and corrected on a timely basis.
Cause: Management's accounting and review process does not have sufficient controls to ensure accurate and timely reporting.
Effect: Management's was unable to produce accurate and timely financial statements to meet the reporting requirements of the entity.
Recommendation: We recommend that Management review their processes and procedures for identifying and reconciling the financials for the entity.
Reporting Views of
Responsible Officials: HIP Housing had a system conversion from QuickBooks to Yardi in July 2021. Our go live date was July 1, 2021 which makes fiscal year 21-22 our first year of audit in our new system for HHAV, HIP Housing, and HHDC. Due to difficulties and complications related to our conversion, mapping of conversion data, validating beginning balances, and closing out the year took us much longer that we expected. That significantly delayed our year end closing process.
Such a delay is common when organizations are going through system conversions. Now that we will have audited beginning balances in Yardi, such delays should be reduced. We have already started taking measures to ensure that financials are completed and reconciled in a reasonable period for future audits. Some of these measures include monthly A/R and A/P tie outs of the A/R and A/P sub-ledgers to the general ledger and also a monthly reconciliation of intercompany reconciliations. We have also started using import files to record most of the intercompany transactions which will simplify/improve our intercompany reconciliation.