Village Cooperative of Le SueurNon-Profit

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative's financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative's business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accoreance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: The finding was reported in the prior year as finding 2024-001. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 26 in this audit report.

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: The finding was reported in the prior year as finding 2023-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 26 in this audit report.

Criteria: Generally, a system of internal control contemplates segregation 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 transactions. Condition: Due to the limited size of the Cooperative’s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper segregation of duties at this time. Effect: The Cooperative is unable to maintain segregation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: The finding was reported in the prior year as finding 2022-001. Recommendation: We recommend that the Cooperative continue to segregate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 27 in this audit report.

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative’s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative’s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: The finding was reported in the prior year as finding 2022-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 27 in this audit report.

Finding 2022-001 Criteria: Generally, a system of internal control contemplates segregation 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 transactions. Condition: Due to the limited size of the Cooperative?s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper segregation of duties at this time. Effect: The Cooperative is unable to maintain segregation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: The finding was reported in the prior year as finding 2021-001. Recommendation: We recommend that the Cooperative continue to segregate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 28 in this audit report.

Finding 2022-002 Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative?s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative?s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative is unable to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: The finding was reported in the prior year as finding 2021-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on page 28 in this audit report.

Finding 2021-001 Criteria: Generally, a system of internal control contemplates segregation 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 transactions. Condition: Due to the limited size of the Cooperative?s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper segregation of duties at this time. Effect: The Cooperative is unable to maintain segregation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative continue to segregate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 28-29 in this audit report.

Finding 2021-002 Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative?s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative?s business staff and related resources available, the Cooperative has utilized the auditor to post adjusting journal entries and prepare the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative is unable to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 28-29 in this audit report.

Finding 2021-003 Criteria: The Cooperative is required to annually submit an audit electronically to the Federal Audit Clearinghouse. Condition: The Cooperative has not filed annually with the Federal Audit Clearinghouse. Questioned Costs: None. Context: The Cooperative did not file annually with the Federal Audit Clearinghouse. Effect: The Cooperative is out of compliance with their HUD regulatory agreement. Cause: The Cooperative was unaware of the need to file annually with the Federal Audit Clearinghouse. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative file annually with the Federal Audit Clearinghouse. Current Status: Resolved, the Cooperative has filed this annual audit report with the Federal Audit Clearinghouse. Action Taken: The Cooperative will file annually with the Federal Audit Clearinghouse. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 28-29 in this audit report.

Finding 2021-004 Criteria: The establishment and maintenance of a general operating reserve fund is a program requirement applicable to cooperative housing insured by HUD. Monthly payments of not less than 3% of the monthly charges to members are required. Upon accrual of an amount equal to 15% of the current annual charges to members, the rate may be reduced from 3% to 2% provided the total of the operating reserve does not fall below 15% of annual charges. Upon the operating reserve reaching 25% of the annual charges, payments into the reserve may be discontinued so long as the 25% level is maintained. If the level falls below 25%, monthly deposits of 3% of monthly charges shall commence until the 25% level is restored. Condition: The Cooperative did not adequately fund the general operating reserve. No contributions to the general operating reserve were made during the year. Questioned Costs: None. Context: The Cooperative did not adequately fund the general operating reserve. Effect: The Cooperative is out of compliance with their HUD regulatory agreement. Cause: The Cooperative raised their monthly charges to members and inadvertently did not properly fund their general operating reserve to keep the 25% level maintained. Repeat Finding: N/A. Recommendation: We recommend that the Cooperative fund the general operating reserve to reach the 25% of annual charges to members. Current Status: Resolved, the Cooperative has properly funded their general operating reserve to 25% of annual charges to members. Action Taken: The Cooperative will properly fund their general operating reserve to 25% of annual charges to members. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 28-29 in this audit report.

SECTION II FINDINGS ? FINANCIAL STATEMENTS AUDIT PREVIOUSLY REPORTED ITEMS NOT RESOLVED Finding 2019-001 Criteria: 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 transactions. Condition: Due to the limited size of the Cooperative?s business staff, the Cooperative has limited segregation of duties. Questioned Costs: None. Context: The Cooperative has informed us that the small size of its business office staff precludes proper separation of duties at this time. Effect: The Cooperative is unable to maintain separation of incompatible duties. Cause: Limited number of staff in the business office. Repeat Finding: This finding was reported in the prior year as finding 2018-001. Recommendation: We recommend that the Cooperative continue to separate incompatible duties as best it can within the limits of what the Cooperative considers to be cost beneficial. Current Status: Unresolved, the Cooperative still has a limited number of staff in the business office. Action Taken: The Cooperative reviews and makes improvements to its internal controls on an ongoing basis, and attempts to maximize the segregation duties in all areas within the limits of the staff available. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 27 to 28 in this audit report.

SECTION II FINDINGS ? FINANCIAL STATEMENTS AUDIT (continued) PREVIOUSLY REPORTED ITEMS NOT RESOLVED (continued) Finding 2019-002 Criteria: Generally, a system of internal control includes the ability to understand and prepare the Cooperative?s financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: Due to the limited size of the Cooperative?s business staff and related resources available, the Cooperative has utilized the auditors experience to assist with adjusting journal entries and preparing the financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Context: The Cooperative has informed us that the small size and qualifications of its business office staff precludes the Cooperative from posting adjusting journal entries and preparing its own financial statements. Effect: The Cooperative utilizes the auditor to prepare GAAP based financial statements. Cause: Limited number of staff and hours available preclude the Cooperative from preparing the GAAP based financial statements. The Cooperative will continue to review auditor prepared financial statements. Repeat Finding: This finding was reported in the prior year as finding 2018-002. Recommendation: We recommend that the Cooperative continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Current Status: Unresolved, the number of staff and qualifications of staff have not changed. The Cooperative is continuing to review the auditor prepared adjusting journal entries and financial statements. Action Taken: The Cooperative will continue to review the auditor prepared adjusting journal entries and financial statements with the intention of understanding and acceptance of responsibility for reporting under generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Cooperative agrees with this finding and will adhere to the corrective action plan on pages 27 to 28 in this audit report.

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