FAC Explorer

Audit 10353

FY End
2023-09-30
Total Expended
$1.53M
Findings
6
Programs
1
Organization: Heritage Manor, Inc. (MN)
Year: 2023 Accepted: 2024-01-09
Auditor: Hoffman & Brobst Pllp

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
7944 2023-001 - - N
7945 2023-002 Significant Deficiency - N
7946 2023-003 - - N
584386 2023-001 - - N
584387 2023-002 Significant Deficiency - N
584388 2023-003 - - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $1.53M Yes 3

Contacts

Name Title Type
FGJFFC84FKT7 Sara Wohlers Auditee
3202696640 Lisa Zmeskal Auditor
No contacts on file

Notes to SEFA

Title: REPORTING ENTITY Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The schedule of expenditures of federal awards presents the activities of the federal award program expended by Heritage Manor, Inc. The Organization’s reporting entity is defined in Note 1 to the financial statements.
Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Heritage Manor Apartments, the project of Heritage Manor, Inc. (HUD Project No. 092-EE044-WAH), under programs of the federal government for the year ended September 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, the activities, functional expenses, or cash flows of the Organization.
Title: LOAN PROGRAMS AND LOAN GUARANTEE PROGRAMS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Heritage Manor, Inc. did not provide loan programs or loan guarantee programs, accordingly, there are no year-end loan balances.
Title: DONATED FEDERALLY FUNDED PERSONAL PROTECTIVE EQUIPMENT Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Heritage Manor, Inc. did not receive any donated federally funded personal protective equipment.

Finding Details

Finding 2023-001
Condition: During the audit process, a material audit adjustment was identified. The adjustment pertained to recording the current year depreciation expense. Effect: A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent or detect misstatements on a timely basis. This could affect the Organization’s ability to initiate, record, process, and report financial data consistent with the assertion of management in the financial statements. Cause: The management agent did not make all necessary adjustments to the financial statements prior to the audit process. Criteria: The Organization should have procedures in place and these procedures must be followed to ensure all necessary adjustments are made to the financial statements. Recommendation: We recommend that the Organization verifies all necessary adjustments are made to the financial statements prior to the audit process. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.
Finding 2023-002
Condition: The Organization has established internal controls over compliance for the major federal programs; however, these controls failed for the reserve for replacements account deposit. Effect: The Organization did not follow it’s established controls for compliance with the requirement to make monthly deposits into the reserve for replacements account, and as a result, the Organization is not in compliance with this requirement of the federal programs. Cause: The Organization bypassed the established controls over this compliance requirement. Criteria: The Organization should have control procedures in place to ensure all compliance requirements applicable to the federal programs are met. Questioned Costs: There are no questioned costs associated with this finding. Context: During our examination of compliance with all program requirements we noted one instance of internal controls not preventing noncompliance with the requirements of the federal program. Recommendation: We recommend that the Organization ensure that the appropriate controls established over the federal program compliance requirements are being followed. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.
Finding 2023-003
Condition: We noted that the required deposit to the reserve for replacements account was not made before the end of the current fiscal year. Effect: The Organization was not in compliance with the requirement to make the required deposit into the reserve for replacements account in a timely manner. Cause: The minimum required deposit was not made until after the current fiscal year end. Management was aware of the amount required to be deposited; however, the processing of the transfer was missed. Criteria: The Organization should make the required deposit to the reserve for replacements account on a timely basis. Questioned Costs: There are no questioned costs associated with this finding. Context: $2,177 of the required deposit should have been made by September 30, 2023. Recommendation: We recommend that the Organization ensure that the required deposit to the reserve for replacements account be made on a timely basis. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.
Finding 2023-001
Condition: During the audit process, a material audit adjustment was identified. The adjustment pertained to recording the current year depreciation expense. Effect: A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent or detect misstatements on a timely basis. This could affect the Organization’s ability to initiate, record, process, and report financial data consistent with the assertion of management in the financial statements. Cause: The management agent did not make all necessary adjustments to the financial statements prior to the audit process. Criteria: The Organization should have procedures in place and these procedures must be followed to ensure all necessary adjustments are made to the financial statements. Recommendation: We recommend that the Organization verifies all necessary adjustments are made to the financial statements prior to the audit process. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.
Finding 2023-002
Condition: The Organization has established internal controls over compliance for the major federal programs; however, these controls failed for the reserve for replacements account deposit. Effect: The Organization did not follow it’s established controls for compliance with the requirement to make monthly deposits into the reserve for replacements account, and as a result, the Organization is not in compliance with this requirement of the federal programs. Cause: The Organization bypassed the established controls over this compliance requirement. Criteria: The Organization should have control procedures in place to ensure all compliance requirements applicable to the federal programs are met. Questioned Costs: There are no questioned costs associated with this finding. Context: During our examination of compliance with all program requirements we noted one instance of internal controls not preventing noncompliance with the requirements of the federal program. Recommendation: We recommend that the Organization ensure that the appropriate controls established over the federal program compliance requirements are being followed. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.
Finding 2023-003
Condition: We noted that the required deposit to the reserve for replacements account was not made before the end of the current fiscal year. Effect: The Organization was not in compliance with the requirement to make the required deposit into the reserve for replacements account in a timely manner. Cause: The minimum required deposit was not made until after the current fiscal year end. Management was aware of the amount required to be deposited; however, the processing of the transfer was missed. Criteria: The Organization should make the required deposit to the reserve for replacements account on a timely basis. Questioned Costs: There are no questioned costs associated with this finding. Context: $2,177 of the required deposit should have been made by September 30, 2023. Recommendation: We recommend that the Organization ensure that the required deposit to the reserve for replacements account be made on a timely basis. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.