West Elmwood Housing Development Corporation

Condition - Significant prior period adjustments were required to properly reflect the accounts and transactions as of the beginning of the year; Criteria - generally accepted accounting principles identifies the basic accounting practices that are required to be followed; Cause - neither the Organization’s staff nor the prior auditor had the requisite experience to identify and correct the accounting errors; Effect - prior period adjustments totaled $8,285,730; Recommendation - the Organization needed to hire a person with financial experience and/or engage the services of another independent party to review its financial statements for propriety; Response -the Organization experienced a significant turnover in staff during the year resulting in ineffectual cut-off procedures and a review of the prior year financial statements. Late in the year, the organization hired a controller to provide for significantly improved accounting procedures and applications as well as the ability to review the annual financial statements.