Finding Text
2022 ? 003 ? Segregation of Duties Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: WI39S961001 Award Period: 2021-2022 Type of Finding: ? Material Weakness in Internal Control over Financial Reporting ? Material Weakness in Internal Control Over Compliance Criteria or specific requirement: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Condition: Responsibilities related to cash receipts, cash disbursements, certifications of tenant eligibility, replacement reserve deposits, residual receipts deposits, and financial reporting have not been segregated; a single individual collects receipts, prepares and signs checks, prepares and approves certifications of tenant eligibility, and maintains the accounting records if the Project. Neither cash receipts, cash disbursements, financial records, not bank reconciliations are reviewed on a regular basis by an individual other than the preparer. Monitoring controls are not in place to ensure the certifications of tenant eligibility have been completed accurately and timely, replacement reserve deposits are made monthly, or the residual receipts calculation is accurate and any required deposits are made within 90 days of the end of the fiscal year. Questioned Costs: None Context: Small staff prevents adequate segregation of duties. Cause: The Project is management by management agent with limited staff. Small Staff prevents adequate segregation of duties. Effect: Lack of segregation of duties could result in financial statement misstatement, caused by error or fraud, that would not be detected or prevented by the Project. Repeat Finding: Repeat Finding 2021-003. Recommendation: The Project should continue to evaluate its staffing in order to segregate incompatible duties whenever possible. Views of Responsible officials and planned corrective actions: There is no disagreement with the finding. The board of directors will continue to closely monitor the financial operations of the Project.