Juneau County Housing Authority

2022-001 – Lack of Segregation of Duties Criteria: Internal control is a process, affected by the Housing Authority of the County of Juneau's (the Authority) board of commissioners, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. A good system of internal control provides for an adequate segregation of duties so that no one individual handles a transaction from its inception to completion. Condition: Due to the limited employees and resources available to the Authority, many aspects of the internal control structure that rely on segregation of duties are missing. Specific accounting processes noted that are affected by the lack of segregation of duties include: cash disbursements, payroll disbursements, cash receipting, and specific reporting functions required for the Authority. Cause: Due to the limited number of personnel within the Authority, segregation of the accounting functions necessary to ensure adequate internal accounting control is not possible. This is not unusual in operations the size of the Authority; however, management should constantly be aware of this condition and realize that the concentration of duties and responsibilities in a limited number of individuals is not desirable from an accounting point of view. Effect: Inadequate segregation of duties could adversely affect the Authority’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by personnel in the normal course of performing their assigned functions. Recommendation: We recommend that the Authority’s board of commissioners and management be aware of the lack of segregation of the accounting functions and, where possible, implement oversight procedures to ensure the internal control policies and procedures are being implemented by personnel to the extent possible. View of Responsible Officials: Management agrees with the finding.

2022-002 – Insufficient Collateral Criteria: A good system of internal control contemplates an adequate system for monitoring the requirements of pledged collateral Condition: The Rural Development Audit Guide requires that any portion of Housing Authority Funds not insured by a Federal insurance organization shall be fully (100%) and continuously collateralized with specific and identifiable U.S. Government or Agency securities prescribed by Rural Development in a notice. Collateralization is required on a daily basis at the end of the business day. Such securities shall be pledged and set aside in accordance with applicable law or Federal regulations. The Authority had no pledged collateral as of December 31, 2022. The Authority’s deposits were under collateralized by approximately $215,340 at December 31, 2022. Cause: The Authority does not have an internal control system designed to properly monitor the requirements of pledged collateral Effect: At year-end, the Authority did not have sufficient collateral pledged and was not in compliance with RD regulations. Additionally, non-compliance increases the custodial risk of the Authority. Recommendation: We recommend the Authority monitor all deposits to determine there is adequate collateral pledged to secure deposits in accordance with RD regulations. View of Responsible Officials: The management of the Authority is in agreement with the finding.

Criteria: Internal controls over financial reporting should exist to ensure that material misstatements are prevented, detected, and corrected by management in a timely manner. Condition: Audit procedures over long-term obligations, revenue, and unrestricted net position identified several errors, misclassifications and unrecorded liabilities that resulted in material adjustments. We proposed material audit adjustments that would not have been identified as a result of the Authority's existing internal control system and, therefore, could have resulted in a material misstatement of the Authority's financial statements. The material misstatements detected as a result of audit procedures were corrected by management. Cause: The Authority did not have the proper controls in place to detect misstatements in the financial statements. Effect: The accounting records for the long-term obligations, revenue, and unrestricted net position required material adjustments to be proposed and recorded in order for the financial statements to be fairly presented in accordance with accounting principles generally accepted in the United States of America. Recommendation: We would recommend the Authority review all adjusting entries posted and make all such necessary adjustments in the future. We would recommend the Executive Director monitor all financial activity and adjust account balances as needed throughout the year and at year-end to prevent misstatements from occurring. Views of Responsible Official: Management agrees with the finding. The Authority will review all adjusting entries posted and make all such necessary adjustments in the future. The Executive Director will continue to monitor all financial activity and adjust account balances as needed throughout the year and at year-end to prevent misstatements from occurring.