FAC Explorer

Audit 15874

FY End
2023-06-30
Total Expended
$10.89M
Findings
2
Programs
2
Organization: Mercer County Housing Associates LLC (PA)
Year: 2023 Accepted: 2024-02-06
Auditor: Maher Duessel CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
11919 2023-001 Significant Deficiency - E
588361 2023-001 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $7.71M Yes 1
14.195 Section 8 Housing Assistance Payments Program $3.19M - 0

Contacts

Name Title Type
NARNSMJTUN94 Holly Nogay Auditee
7243424000 Robert A. Belicose Auditor
No contacts on file

Notes to SEFA

Title: Loan/Loan Guarantee Outstanding Balances 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. De Minimis Rate Used: N Rate Explanation: Mercer County Housing Associates LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Mercer County Housing Associates LLC has received a U.S. Department of Housing and Urban Development insured mortgage under Section 223(f)/207 of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Mercer County Housing Associates LLC received no additional loans during the year. The balance of the loan outstanding at June 30, 2023 is $7,489,789.
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. De Minimis Rate Used: N Rate Explanation: Mercer County Housing Associates LLC 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 (Schedule) includes the federal award activity of Mercer County Housing Associates LLC and 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 Mercer County Housing Associates LLC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Mercer County Housing Associates LLC.

Finding Details

Finding 2023-001
U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ALN 14.155 Eligibility Condition: During our review of HUD-50059, Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures (OMB No. 2502-0204) (HUD-50059) forms, we noted one form out of a sample of 40 that did not contain support for the income reported on the HUD-50059. The Company did not have internal controls in place to identify the lack of supporting documentation for the income included. Criteria: Management is responsible for establishing internal controls to ensure the accuracy of yearly completion and submission of the HUD-50059 of households occupying assisted units and making appropriate adjustments to the tenant and housing assistance payment (24 CFR section 891.410). Cause: During the year, the Company experienced turnover with personnel in the property manager roles responsible for the completion of the HUD-50059 and internal controls were not in place for proper review of the HUD-50059. Effect: There was no support for the income amount used. If the income amount used was incorrect, the Company’s rent charged could be improperly allocated between the tenant portion and the housing assistance portion. Questioned Costs: Unknown Recommendation: The Company should have internal controls in place to review form HUD-50059 to ensure all documentation used to calculate the tenant rent and housing assistance payment is supported and properly calculated. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.
Finding 2023-001
U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ALN 14.155 Eligibility Condition: During our review of HUD-50059, Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures (OMB No. 2502-0204) (HUD-50059) forms, we noted one form out of a sample of 40 that did not contain support for the income reported on the HUD-50059. The Company did not have internal controls in place to identify the lack of supporting documentation for the income included. Criteria: Management is responsible for establishing internal controls to ensure the accuracy of yearly completion and submission of the HUD-50059 of households occupying assisted units and making appropriate adjustments to the tenant and housing assistance payment (24 CFR section 891.410). Cause: During the year, the Company experienced turnover with personnel in the property manager roles responsible for the completion of the HUD-50059 and internal controls were not in place for proper review of the HUD-50059. Effect: There was no support for the income amount used. If the income amount used was incorrect, the Company’s rent charged could be improperly allocated between the tenant portion and the housing assistance portion. Questioned Costs: Unknown Recommendation: The Company should have internal controls in place to review form HUD-50059 to ensure all documentation used to calculate the tenant rent and housing assistance payment is supported and properly calculated. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.