B'Nai B'Rith Women Senior Citizen HousingNon-Profit

Criteria: The Organization’s regulatory agreement provides that the Organization’s books and accounts must be complete, accurate, and current at all times. Posting must be made at least monthly to the ledger accounts, and year-end adjusting entries must be posted promptly in accordance with sound accounting principles. Additionally, the Organization has reporting objectives under Uniform Guidance that require books to be maintained under the accrual basis of accounting and follow GAAP. Condition: The Organization lacks sufficient controls surrounding financial reporting, year-end close, and oversight of the Organization’s financial reporting and internal controls by those charged with governance. Cause: The Organization failed to ensure proper oversight over those in the accounting and financial reporting function. The Organization also maintains their books and records on a cash-basis throughout the year. Substantial corrections are required to bring the Organization’s financial statements in compliance with GAAP. Effect: The issue discussed above resulted in preliminary balances being misstated and required a large number of material adjustments to correct the balances. The matter is considered a finding and a significant deficiency in internal control over financial reporting and on compliance in accordance with Government Auditing Standards. Recommendation: We recommend that the Organization review the month-end and year-end closing procedures in order to determine what additional internal controls are needed to ensure the books and records are in accordance with generally accepted accounting principles throughout the year. We recommend formal month-end and year-end closing schedules be created that include all tasks necessary to close the books. As part of the tasks, the Organization should reconcile the general ledger accounts for all significant balances to supporting documentation on a monthly basis. Views of Responsible Officials: The Organization agrees with the finding and the auditors’ recommendation will be completed. Management will record all adjusting entries and will implement measures to ensure all supporting schedules and documents are reconciled to the underlying general ledger accounts consistently and timely going forward. Condition Status: In Progress Repeat Finding: Yes; finding is a repeat from prior audit finding 2022-001.

Criteria: According to the Regulatory Agreement, The Organization is required to make monthly deposits into its Reserve for Replacement account and that the amount of the monthly deposit may be increased at the written direction of HUD. Condition: HUD provided notice to the Organization that its required monthly deposit would increase from $1,750 to $1,792 effective March 1, 2023. However, the Organization failed to increase its monthly deposits. Cause: A process control to ensure the automatic transfer of deposits from the operating account to the replacements reserve was updated in accordance with HUD directives was not in place. Effect: Deposits for two months during the year were underfunded. Therefore, the Organization is not in compliance with the Regulatory Agreement. Recommendation: We recommend management implement a control to ensure that correspondence from HUD, especially those requiring changes to the required monthly deposits, are reviewed and documented to ensure compliance the Regulatory Agreement. Views of Responsible Officials: The Organization agrees with the finding and the recommendation will be implemented. Controls implemented include ensuring that evidence supporting management’s review of HUD correspondence is maintained and that such correspondence is forwarded to the individual responsible for any relevant updates. Condition Status: In Progress Repeat Finding: No

Criteria: According to the Regulatory Agreement, the Organization is permitted only to make cash distributions for reasonable operating expenses attributable to the Project. Condition:The Organization mistakenly made payments to a vendor for services provided to a separate, related party. Cause: A process control at the Management Agent to ensure that Project funds were used to pay services provided to the Organization failed to work as intended. The services were rendered to an entity with a similar name. Effect: Project funds were used to pay for expenses provided to another entity. Recommendation: The Organization should ensure controls in place at the Management Agent include verification that all payments made from Project funds are for services rendered to the Organization, including secondary review. Views of Responsible Officials: The Organization agrees with the finding and the recommendation will be implemented. Condition Status: Closed Repeat Finding: No

Criteria: Per the regulatory agreement, the Project is required to submit audited financial statements to HUD within 90 days of a Project’s fiscal year end. In addition, Uniform Guidance 2 CFR Subpart F 200.512, the audit must be completed and the data collection form and reporting package submitted within the earlier of 30 days after receipt of the auditor’s report, or nine-months after the end of the audit period. Condition:The Organization did not meet its financial statement filing requirements under both HUD regulations and those under Uniform Guidance for the year ended. Cause: Additional time was required to obtain certain information to complete the financial statement audit. Effect: HUD does not have the financial information of the project available for review. HUD may request the holder of the note declare the note immediately due for non-compliance with the regulatory agreement. Recommendation: We recommend that management implement internal controls to ensure that the audited financial statements are filed with HUD in accordance with the regulatory agreement. Views of Responsible Officials: The Organization will follow the HUD filing requirements of the regulatory agreement going forward. The financial statements for the year ended April 30, 2023, will be submitted electronically to HUD no later than June 30, 2024. Condition Status: Completed Repeat Finding: No

Criteria: According to the Regulatory Agreement, The Organization is required to make monthly deposits into its Reserve for Replacement account. Condition:The Organization did not make all required deposits into the Reserve for Replacements bank account in a timely manner. Cause: The Organization received a waiver of monthly deposits for the period from March 1, 2022 to August 31, 2022, at which time the Organization was required to begin making deposits again. A process control to ensure the restoration of automatic transfer of deposits from the operating account to the replacements reserve on a monthly basis was not in place. Effect: Deposits for seven of the twelve months of the year were not made timely. Therefore, the Organization is not in compliance with the Regulatory Agreement. Recommendation: We recommend management implement a control to ensure the monthly transfer is completed automatically and in accordance with the Regulatory Agreement. Views of Responsible Officials: The Organization agrees with the finding and the recommendation will be implemented. Controls implemented include scheduling of automatic transfers to the reserve for replacement savings account as well as updating our treasury standard operating procedures to ensure funds are available for the transfer. Condition Status: In Progress Repeat Finding: No

Criteria: The Organization?s regulatory agreement provides that the Organization?s books and accounts must be complete, accurate, and current at all times. Posting must be made at least monthly to the ledger accounts, and year-end adjusting entries must be posted promptly in accordance with sound accounting principles. Additionally, the Organization has reporting objectives under Uniform Guidance that require books to be maintained under the accrual basis of accounting and follow GAAP. Condition: The Organization lacks sufficient controls surrounding financial reporting. The lack of controls resulted in subsidiary and supporting schedules not reconciling to their respective accounts. Cause: It was noted that Organization maintains their books and records on a cash-basis throughout the year. Substantial corrections are required to bring the Organization?s financial statements in compliance with GAAP. Effect: The issue discussed above resulted in preliminary balances being misstated and required a large number of correcting journal entries to correct the balances. The matter is considered a finding and a significant deficiency in internal control over financial reporting and on compliance in accordance with Government Auditing Standards. Recommendation: We recommend that the Organization review the month-end and year-end closing procedures in order to determine what additional internal controls are needed to ensure the books and records are in accordance with generally accepted accounting principles throughout the year. We recommend formal month-end and year-end closing schedules which include all tasks necessary to close the books be established. As part of the tasks, the Organization should reconcile the general ledger accounts for all significant balances to supporting documentation on a monthly basis. Views of Responsible Officials: The Organization agrees with the finding and the auditors? recommendation will be completed. Management will record all adjusting entries and will implement measures to ensure all supporting schedules and documents are reconciled to the underlying general ledger accounts consistently and timely going forward. Information: Refer to Financial Statement Finding No. 2022-001 for a detailed description of this finding. Condition Status: In Progress Repeat Finding: Portions of this finding are a repeat from the immediate previous audit finding 2021-001. It should be noted that the Organization had made improvements with regards to the prior audit finding.

Criteria: The Organization?s regulatory agreement provides that the Organization?s books and accounts must be complete, accurate, and current at all times. Posting must be made at least monthly to the ledger accounts, and year-end adjusting entries must be posted promptly in accordance with sound accounting principles. Additionally, the Organization has reporting objectives under Uniform Guidance that require books to be maintained under the accrual basis of accounting and follow GAAP. Condition: The Organization lacks sufficient controls surrounding financial reporting. The lack of controls resulted in subsidiary and supporting schedules not reconciling to their respective accounts and improper coding of transactions. Cause: It was noted that Organization maintains their books and records on a cash-basis throughout the year. Substantial corrections are required to bring the Organization?s financial statements in compliance with GAAP. Effect: The issue discussed above resulted in preliminary balances being misstated, required a large number of correcting journal entries to correct the balances, and resulted in substantial delay in the completion of the Organization?s financial statement audit. The matter is considered a finding and a significant deficiency in internal control over financial reporting and on compliance in accordance with Government Auditing Standards. Recommendation: We recommend that the Organization, in conjunction with their contracted third-party CPA firm, review the month-end and year-end closing procedures in order to determine what additional internal controls are needed to ensure the books and records are in accordance with generally accepted accounting principles throughout the year. We recommend formal month-end and year-end closing schedules which include all tasks necessary to close the books be established. The schedules should include a listing of all tasks needed, the individuals responsible and the date on which each procedure is due and is accomplished. As part of the tasks, the Organization should reconcile the general ledger accounts for all significant balances to supporting documentation on a monthly basis. Views of Responsible Officials: The Organization agrees with the finding and the auditors? recommendation will be completed. Management will record all adjusting entries and will implement measures to ensure all supporting schedules and documents are reconciled to the underlying general ledger accounts consistently and timely going forward. Condition Status: In Progress Repeat Finding: Portions of this finding are a repeat from the immediate previous audit finding 2020-001. It should be noted that the Organization had made improvements with regards to the prior audit finding.

Criteria: Per the regulatory agreement, the Project is required to submit audited financial statements to HUD within 90 days of a Project?s fiscal year end. For 2021, HUD granted an extension through February 24, 2022. In addition, Uniform Guidance 2 CFR Subpart F 200.512, the audit must be completed and the data collection form and reporting package submitted within the earlier of 30 days after receipt of the auditor?s report, or nine-months after the end of the audit period. Condition: The Organization did not meet its financial statement filing requirements under both HUD regulations and those under Uniform Guidance for the year ended April 30, 2021. Cause: Additional time was required to obtain certain information to complete the financial statement audit, including the adjustments noted in Finding 2021-001. Effect: HUD does not have the financial information of the project available for review. HUD may request the holder of the note declare the note immediately due for non-compliance with the regulatory agreement. Recommendation: We recommend that management implement internal controls to ensure that the audited financial statements are filed with HUD in accordance with the regulatory agreement. Views of Management: The Organization will follow the HUD filing requirements of the regulatory agreement going forward. The financial statements for the year ended April 30, 2021, were submitted electronically to HUD on March 8, 2022. Condition Status: Completed Repeat Finding: No

Condition: The Organization lacks sufficient controls surrounding financial reporting and cash disbursements, among other areas. The lack of controls resulted in subsidiary and supporting schedules not reconciling to their respective accounts and improper coding of transactions, among other things. The deficiencies are to such an extent that material misstatements in the financial statements may not be prevented, detected, or corrected in a timely basis. Additionally, compliance objectives of the Organization under Uniform Guidance may not be met. Criteria: The Organization?s regulatory agreement provides that the Organization properly maintain their books and records for sound financial reporting. Additionally, the Organization has reporting objectives under Uniform Guidance. Effect: The matter is considered a finding and a material weakness in internal control over financial reporting and on compliance in accordance with Government Auditing Standards. Context: Upon the application of auditing procedures on the financial statements, including the review of a sample of disbursements, it was noted that there were multiple material discrepancies and poor controls at the Organization. Cause: The Organization?s staff is not adequately trained. Additionally, review and reconciliations of various accounts is not performed in a timely manner or is not performed at all. Recommendation: We recommend that the Organization and management agent establish new procedures and controls in their accounting department. Additionally, we recommend that the Organization?s staff receive additional training to familiarize themselves more with the HUD reporting environment. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditors? recommendation will be completed.

Condition: The Organization lacks sufficient controls surrounding financial reporting and cash disbursements, among other areas. The lack of controls resulted in subsidiary details not reconciling to their respective accounts and improper coding of transactions, among other things. The deficiencies are to such an extent that material misstatements in the financial statements may not be prevented, detected, or corrected in a timely basis. Additionally, compliance objectives of the Organization under Uniform Guidance may not be met. Criteria: The Organization?s regulatory agreement provides that the Organization properly maintain their books and records for sound financial reporting. Additionally, the Organization has reporting objectives under Uniform Guidance. Effect: The matter is considered a finding and a material weakness in internal control over financial reporting and compliance in accordance with Government Auditing Standards. Context: Upon the application of auditing procedures on the financial statements, including the review of a sample of disbursements, it was noted that there were multiple material discrepancies and poor controls at the Organization. Cause: The Organization?s staff is not adequately trained. Additionally, review and reconciliations of various accounts is not performed in a timely manner or is not performed at all. Recommendation: We recommend that the Organization and management agent establish new procedures and controls in their accounting department. Additionally, we recommend that the Organization?s staff receive additional training to familiarize themselves more with the HUD reporting environment. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditors? recommendation will be completed.

Condition: Submission of the audited financial statements to the federal audit clearinghouse for the period ending April 30, 2017, was not completed. Submission of the financial statements is still outstanding. Criteria: Submission of the audited financial statements to the federal audit clearinghouse is required to be completed no later than nine months after the end of the audit period. Effect: The filing is considered late. Context: A review on the federal audit clearinghouse website was made to ensure the audited financial statements were submitted. Upon review, it was noted that the audited financial statements were not submitted. Cause: Management was unaware that a submission to the audit clearinghouse website was required. Recommendation: We recommend that management submit the audited financial statements to the federal audit clearinghouse. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditors? recommendation will be completed.

Condition: Deposits of $9,786 due to the residual receipts account, for the year ended April 30, 2018, were not made until June 26, 2019. Criteria: Deposit of residual receipts is required to be made within 60 days after the end of the annual fiscal period within which such receipts were realized. Effect: The deposit is considered late Context: A review of the residual receipt account was made to ensure the deposit was made. Upon the review, it was noted that the deposit was not made until June 26, 2019. Cause: The surplus cash calculation was not completed until the fiscal year end April 30, 2020. Recommendation: We recommend that management establish procedures to ensure residual receipts are deposited within the required timeframe. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor?s recommendation will be completed.

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