| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #7647 | Closed | public | Multifamily | Les Sparks |
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I have a situation where this apartment project loaned the apartment manager employee $3,000 (which is immaterial) and set up a payroll deferral of $50 each semi weekly payroll. The controller suggested to me that it was a mistake and that the loan was meant to be from the related management company but coded wrong by a newer accountant they have on staff. This all happened in the centralized management bank account. All of the apartment managers time is allocated to the HUD project. Can we have them reclass this and not have a compliance finding? |
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From Les Sparks: I guess it is possible to do as you see fit. However, rather than reclass the amount and sort-of ignore it, I would think it would be more palatable to simply indicate an instance of non-material noncompliance. Highlight the materiality issues clearly showing that it is is immaterial. Then add it to the management letter in accordance with the Audit Guide. I think that leaves you in the best place. At that point all anyone can say is that they disagree with materiality which is a pretty hard and fast calculation. |