FAC Explorer

Audit 10357

FY End
2023-09-30
Total Expended
$773,335
Findings
4
Programs
2
Organization: Mighty Fortress Manor (MN)
Year: 2023 Accepted: 2024-01-09
Auditor: Hoffman & Brobst Pllp

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
7947 2023-001 Material Weakness Yes P
7948 2023-002 Significant Deficiency - P
584389 2023-001 Material Weakness Yes P
584390 2023-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $617,311 Yes 2
14.195 Section 8 Housing Assistance Payments Program $156,024 - 0

Contacts

Name Title Type
XSHQBQ1K5MJ5 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 Mighty Fortress Manor the project of Mighty Fortress Manor (HUD Project No. 092-EH178-WAH-L8) 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. Mighty Fortress Manor had an outstanding Section 202 Loan with a balance of $598,382 at September 30, 2023. The Section 202 Loan is guaranteed by the U.S. Department of Housing and Urban Development.
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. Mighty Fortress Manor did not receive any donated federally funded personal protective equipment.

Finding Details

Finding 2023-001
Condition: During the audit process, material audit adjustments were identified. The adjustments pertained to recording the current year payments for real estate taxes. This finding was reported in the previous year as number 2022-001. 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 assertions 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: During the audit process, we noted two instances where there was a lack of control over cash management. In one situation, the Organization properly requested a transfer of funds from the residual receipts account in February 2023, but the transfer did not take place, and the funds were not received. The other situation involved the dating and issuance of a check near year end. The check was written and dated on September 28, 2023 and was correctly included as an outstanding check on the September 30, 2023 bank reconciliation. This check date was later changed to October 1, 2023 in the Organization’s general ledger, which is after the Organization’s fiscal year end. 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 assertions of management in the financial statements. Cause: The management agent was aware of the request for reimbursement from the residual receipts account, but did not follow up to ensure that the funds were actually released and deposited into the Organization’s operating account. The management agent is unsure why the check date was changed in the general ledger after the check was originally written and issued. Criteria: The Organization should have procedures in place to make sure there is adequate review of general ledger activity, and these procedures must be followed to ensure all funds are received and payments are recorded correctly. Recommendation: We recommend that the Organization verifies all requests for reimbursements are received in a timely manner. We also recommend that the Organization verifies that payments are recorded in the correct period and not changed in the general ledger after the checks are written. 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, material audit adjustments were identified. The adjustments pertained to recording the current year payments for real estate taxes. This finding was reported in the previous year as number 2022-001. 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 assertions 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: During the audit process, we noted two instances where there was a lack of control over cash management. In one situation, the Organization properly requested a transfer of funds from the residual receipts account in February 2023, but the transfer did not take place, and the funds were not received. The other situation involved the dating and issuance of a check near year end. The check was written and dated on September 28, 2023 and was correctly included as an outstanding check on the September 30, 2023 bank reconciliation. This check date was later changed to October 1, 2023 in the Organization’s general ledger, which is after the Organization’s fiscal year end. 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 assertions of management in the financial statements. Cause: The management agent was aware of the request for reimbursement from the residual receipts account, but did not follow up to ensure that the funds were actually released and deposited into the Organization’s operating account. The management agent is unsure why the check date was changed in the general ledger after the check was originally written and issued. Criteria: The Organization should have procedures in place to make sure there is adequate review of general ledger activity, and these procedures must be followed to ensure all funds are received and payments are recorded correctly. Recommendation: We recommend that the Organization verifies all requests for reimbursements are received in a timely manner. We also recommend that the Organization verifies that payments are recorded in the correct period and not changed in the general ledger after the checks are written. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and the auditor’s recommendations will be adopted.