Milford Redevelopment and Housing Partnership

Finding 2025-002: Reconciliation and Reporting Reporting Public Housing Operating Fund AL# 14.850 Significant Deficiency Statement of Condition Certain general ledger activity, especially bank accounts and interfund balances, were not recorded or reconciled in a timely manner. Further, the Unaudited Financial Data Schedule (FDS) contained material errors and omissions. Criteria The Authority is responsible for designing, implementing, and maintaining effective internal control over financial reporting to ensure that financial transactions are accurately recorded, properly classified, and reported in accordance with U.S. generally accepted accounting principles. Controls should operate at a level of precision that prevents or detects material misstatements in a timely manner. Further, the FDS is the Authority’s primary means of reporting annual financial and programmatic information and is the basis for meeting financial statement reporting requirements as well as reporting federal expenditures to HUD. Cause Significant employee turnover in key positions within the Authority, including the unexpected loss of the newest Director of Finance. Effect or Potential Effect Significant yearend adjustments were required to report financial activity. In addition, the absence of timely recording and reconciliation reduces the routine review processes, thereby increasing the likelihood that errors, omissions, and misclassifications could occur. Recommendation We recommend the Authority reevaluate internal responsibilities over the internal accounting function to increase financial reconciliation capacity and reduce the reliance of accounting functions on a single position. Management’s Response Management agrees with the finding, see Corrective Action Plan for plan of action.

The first step was to hire a director of finance (the 3rd hirer in the past 2 years passed away suddenly) which was completed in February 2025. The second step was to hire third party CPA consultants familiar with accounting system to correct activity and design of system for ongoing use. Finally, training of support staff and monitoring of the monthly accounting procedures completed upon correction of historical activity.

2024-003

U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Reportable Noncompliance Finding 2024-003: Yearend Reconciliation and Reporting Reporting Housing Choice Vouchers - CFDA #14.871 Financial Statement Finding 2024-001 applies to this federal program.

Corrective Action: The first step is to hire a Chief Financial Officer (the third hirer in the past 2 years passed away suddenly). The second step is to evaluate and segregate internal accounting functions to assure that processes and reconciliations are maintained. Training of support staff and monitoring of the monthly accounting procedures. Responsible Party for Corrective Actions: Anthony Vasiliou, Executive Director Estimated Completion Date: March 31, 2025

Statement of Condition Certain general ledger accounts were not reconciled in a timely manner. In addition, the unaudited and audited Financial Data Schedule (FDS) were not filed in time. Criteria The FDS is the Authority’s primary means of reporting annual financial and programmatic information and is the basis for meeting financial statement reporting requirements as well as reporting federal expenditures to HUD. Cause Significant employee turnover in key positions within the Authority. Effect or Potential Effect Financial items were misstated resulting in delays in the FDS submission and the overall audit completion. Recommendation We recommend the Authority reevaluate internal responsibilities over the periodic reconciliation and closeout of financial activity to assist in meeting reporting obligations. Management’s Response Management agrees with the finding, see Corrective Action Plan for plan of action.

Upon abrupt departure of second finance director replacement in November 2023, the Authority promptly re-hired staff with extensive knowledge in the Authority's programs and systems to correct issues that occurred prior to the departure of the finance director. In addition, the Authority increased the role of the fee accountant to address the items noted during the audit. Responsible Party for Corrective Actions: Anthony Vasiliou, Executive Director Estimated Completion Date: December 29, 2023.