Fraser Indpendent Living Project III, Inc.Non-Profit

Criteria: The Project is responsible for ensuring proper recording of depreciation expense to help ensure the financial statements are prepared in accordance with U.S. GAAP. Condition: Depreciation expense was overstated. Cause: The Project improperly rolled forward accumulated depreciation from 2022 resulting in too high of depreciation expense being recorded in order to reconcile to ending accumulated depreciation as noted on the schedule. Questioned Costs: None Effect: Procedures were not in place to ensure that depreciation schedules were properly rolled forward from 2022. Recommendation: We recommend the Project strengthen procedures to ensure proper rollforward of depreciation schedules. Views of Responsible Officials: Management concurs with the finding and recommendations. Auditor’s Summary of Auditee’s Comments: improperly rolled forward accumulated depreciation from 2022 resulting in too high of depreciation expense being recorded in order to reconcile to ending accumulated depreciation as noted on the schedule. Management’s Response: Management concurs with the finding and recommendations. Management concurs with the finding and recommendations. Management will implement an additional review step to ensure opening balances on the depreciation schedules are in agreement with the prior year ending balances.

Corrective Action Completed Finding 2022-1, U.S. Department of Housing and Urban Development (HUD) Real Estate Assessment Center (REAC) Inspection Late Response Statement of Condition: On August 8, 2022, the U.S. Department of Housing and Urban Development (HUD) Real Estate Assessment Center (REAC) completed an inspection and issued their report to the Project on September 6, 2022, noting certain deficiencies that needed to be addressed. As part of the inspection, the Project was required to respond to HUD within 5 days detailing the actions either taken or planned to mitigate the noted deficiencies. The Project?s written response to HUD was completed on December 20, 2022, which is subsequent to the 5-day requirement. Criteria: The Project?s management is responsible for completing and submitting corrective actions to HUD in a timely manner. Effect: The Project did not submit its response to the REAC inspection within 5 days as required by HUD. Cause: The Project forgot to submit its response, therefore, the response occurred after the 5-day requirement. Recommendation: We recommend that Project management respond to future REAC inspections within the 5-day requirement or notify HUD of the delays and request an extension prior to the 5-day deadline. View of Responsible Officials: Management agrees that the response to HUD occurred after the 5-day requirement. We intend to address any future REAC inspections within the 5-day requirement.Auditor?s Summary of the Auditee?s Comments: The Project did not submit its response to the REAC inspection within 5 days as required by HUD. The Project?s management agrees that the response to HUD occurred after the 5-day requirement and intends to address any future REAC inspections within the 5-day requirement. Management?s Response: Management agrees that the response to HUD occurred after the 5-day requirement. We intend to address any future REAC inspections within the 5-day requirement and have responded to REAC as of December 20, 2022.