Unity Homes, Inc.Non-Profit

Finding 2024-001 – Significant Deficiency – Internal Control Over Financial Reporting Criteria: All accrual basis entries need to be made by the Corporation prior to the start of the audit. Condition: Several account balances required adjustments during the audit process. We had 16 adjustments during the audit process. Effect: The general ledger balances required adjustment during the audit process. Cause: Management’s year-end close and review process does not have sufficient controls to ensure all accrual basis closing entries are made. Recommendation: We recommend that Management work with the property management company to ensure all accrual basis entries are made prior to the start of the audit. Consideration should be given to developing a year-end closing checklist to ensure all closing entries, including amortization of deferred loan fees, accrue interest payable, calculation and record depreciation expense, reconcile general ledger to investment statement, and adjust prepaid expenses. Management’s Response: Management will work with the property management company to ensure all required entries are posted during the closing process in the future.