MIGHTY FORTRESS MANOR 092-EH178-WAH-18

Condition: During the audit process, material audit adjustments were identified. The adjustments pertained to recording the current year payments for real estate taxes. This finding was reported in the previous year as number 2022-001. Effect: A control deficiency 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 misstatements on a timely basis. This could affect the Organization’s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. Cause: The management agent did not make all necessary adjustments to the financial statements prior to the audit process. Criteria: The Organization should have procedures in place and these procedures must be followed to ensure all necessary adjustments are made to the financial statements. Recommendation: We recommend that the Organization verifies all necessary adjustments are made to the financial statements prior to the audit process. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.

Condition: During the audit process, we noted two instances where there was a lack of control over cash management. In one situation, the Organization properly requested a transfer of funds from the residual receipts account in February 2023, but the transfer did not take place, and the funds were not received. The other situation involved the dating and issuance of a check near year end. The check was written and dated on September 28, 2023 and was correctly included as an outstanding check on the September 30, 2023 bank reconciliation. This check date was later changed to October 1, 2023 in the Organization’s general ledger, which is after the Organization’s fiscal year end. Effect: A control deficiency 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 misstatements on a timely basis. This could affect the Organization’s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. Cause: The management agent was aware of the request for reimbursement from the residual receipts account, but did not follow up to ensure that the funds were actually released and deposited into the Organization’s operating account. The management agent is unsure why the check date was changed in the general ledger after the check was originally written and issued. Criteria: The Organization should have procedures in place to make sure there is adequate review of general ledger activity, and these procedures must be followed to ensure all funds are received and payments are recorded correctly. Recommendation: We recommend that the Organization verifies all requests for reimbursements are received in a timely manner. We also recommend that the Organization verifies that payments are recorded in the correct period and not changed in the general ledger after the checks are written. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.

2022-001 Audit adjustments Condition: During the audit process, material audit adjustments were identified. The adjustments pertained to recording the current year payments for real estate taxes. This finding was reported in the previous year as number 2021-001. Effect: A control deficiency 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 misstatements on a timely basis. This could affect the Organization?s ability to initiate, record, process, and report financial data consistent with the assertion of management in the financial statements. Cause: The management agent did not make all necessary adjustments to the financial statements prior to the audit process. Criteria: The Organization should have procedures in place and these procedures must be followed to ensure all necessary adjustments are made to the financial statements. Recommendation: We recommend that the Organization verifies all necessary adjustments are made to the financial statements prior to the audit process. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.

2021-001 Audit adjustments Condition: During the audit process, material audit adjustments were identified. The adjustments pertained to recording the current year payments for real estate taxes and property insurance. This finding was reported in the previous year as number 2020-001. Effect: A control deficiency 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 misstatements on a timely basis. This could affect the Organization?s ability to initiate, record, process, and report financial data consistent with the assertion of management in the financial statements. Cause: The management agent did not make all necessary adjustments to the financial statements prior to the audit process. Criteria: The Organization should have procedures in place and these procedures must be followed to ensure all necessary adjustments are made to the financial statements. Recommendation: We recommend that the Organization verifies all necessary adjustments are made to the financial statements prior to the audit process. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.

2020-003 Lack of controls over compliance of federal programs Condition: The Organization has established internal controls over compliance for the major federal programs; however, these controls failed for the residual receipts account deposit. Effect: The Organization did not follow it?s established controls for compliance with the requirement to make the residual receipts account deposit within 60 days of the previous year end, and as a result, the Organization is not in compliance with this requirement of the federal programs. Cause: The Organization bypassed the established controls over this compliance requirement. Criteria: The Organization should have control procedures in place to ensure all compliance requirements applicable to the federal programs are met. Questioned Costs: There are no questioned costs associated with this finding. Context: During our examination of compliance with all program requirements we noted one instance of internal controls not preventing noncompliance with the requirements of the federal program. Recommendation: We recommend that the Organization ensure that the appropriate controls established over the federal program compliance requirements are being followed. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.

2020-004 Required residual receipts deposit was not made before the 60-day after year-end deadline Condition: We noted that the required deposit to the residual receipts reserve was made after the 60-day deadline following the 2019 fiscal year end. Effect: The Organization was not in compliance with the requirement to make the required deposit into the residual receipt reserve in a timely manner. Cause: The deposit was made when the annual audit was submitted to HUD, which was beyond the 60-day deadline. Criteria: The Organization should have procedures in place to ensure the required deposit to the residual receipts account is made on a timely basis. Questioned Costs: There are no questioned costs associated with this finding. Context: The residual receipts account deposit was made 105 days after the September 30, 2019 fiscal year end. Recommendation: We recommend that the Organization ensure that the required deposit to the residual receipts account be made on a timely basis. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.

2019-002 Lack of controls over compliance of federal programs Condition: The Organization has established internal controls over compliance for the major federal programs; however, these controls failed for procurement policy. Effect: The Organization did not follow it?s established controls for compliance with the requirement to have a written procurement policy, and as a result, the Organization is not in compliance with this requirement of the federal programs. Cause: The Organization bypassed the established controls over this compliance requirement. Criteria: The Organization should have control procedures in place to ensure all compliance requirements applicable to the federal programs are met. Questioned Costs: There are no questioned costs associated with this finding. Context: During our examination of compliance with all program requirements we noted one instance of internal controls not preventing noncompliance with the requirements of the federal program. Recommendation: We recommend that the Organization ensure that the appropriate controls established over the federal program compliance requirements are being followed. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.

2019-003 Improper procurement policy Condition: The Organization has not updated its procurement policy to comply with the requirements of the Uniform Guidance. Effect: The Organization has not implemented a policy to ensure compliance with the requirements of the Uniform Guidance in respect to Procurement/Suspension and Debarment and is not in compliance with this requirement of the federal program. Cause: The Organization?s board of directors and it?s management agent did not update the written procurement policies to be compliant with the Uniform Guidance. Criteria: The Organization must establish a written procurement policy as required by the Uniform Guidance to ensure all compliance requirements applicable to the federal program are met. Questioned Costs: There are no questioned costs associated with this finding. Context: During the course of our audit we noted no improper procurements made by the Organization; however, there is no updated written policy governing these procurements as required by the Uniform Guidance. Recommendation: We recommend that the Organization adopt a written procurement policy to ensure that the federal program compliance requirements are being followed. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendations will be adopted.