FAC Explorer

Audit 1699

FY End
2022-12-31
Total Expended
$3.16M
Findings
2
Programs
5
Organization: Pilgrim Towers, Inc. (CT)
Year: 2022 Accepted: 2023-10-30
Auditor: Whittlesey PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
916 2022-001 - Yes P
577358 2022-001 - Yes P

Programs

ALN Program Spent Major Findings
14.218 Community Development Block Grants/entitlement Grants $1.63M Yes 0
14.239 Home Investment Partnerships Program $800,000 Yes 0
14.164 Flexible Subsidy Loan (section 201) $373,400 Yes 1
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $304,264 - 0
14.191 Multifamily Housing Service Coordinators $50,827 - 0

Contacts

Name Title Type
HS2NGCSLY253 Pat Thatcher Auditee
2036536538 Nicholas Yanouzas Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – 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: The ten percent de minimis indirect cost rate is not applicable to the HUD funded loan and housing assistance program. The accompanying Schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Pilgrim Towers, Inc. (the “Corporation”) under programs of the federal government for the year ended December 31, 2022. 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 Agency, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Agency.
Title: NOTE 3 – FEDERALLY FUNDED LOANS 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: The ten percent de minimis indirect cost rate is not applicable to the HUD funded loan and housing assistance program. Federally funded loans reported on the Schedule include the amount of new loans funded during the year ended December 31, 2022, the beginning balances of loans from the previous year that have continuing compliance imposed by HUD and subsidized interest that has been accrued in accordance with the promissory notes, as applicable. The ending principal balances of federally funded loans as of December 31, 2022 are as follows: Flexible Subsidy Loan (Section 201) January 1, 2022 - $482,095, Accrued interest for 2022 - $3,734, Flexible Subsidy Loan (Section 201) December 31, 2022 - $485,829. Community Development Block Grants/Entitlement Grants - $1,630,446. Home Investment Partnerships Program - $800,000.

Finding Details

Finding 2022-001
Finding reference number: 2022-001 Title and CFDA: Flexible Subsidy Loan 14.164 Type of Finding: FA Finding resolution status: In process Identification of repeat finding: 2021-002 Criteria: The Flexible Subsidy Loan "Residual Receipts Note" clause 3(a) cites that the entire principal together with interest is immediately due and payable when the HUD Section 202 mortgage is paid off. Statement of Condition: During our audit for the year ended December 31, 2021, we inquired and requested documentation regarding the repayment status of the Flexible Subsidy Loan from the Agency's officers and from its management company. The Agency did not have documentation regarding the mortgage status of the Flexible Subsidy Loan available since the HUD Section 202 mortgage was paid off in November 2016. Cause: The Agency is waiting for a response from HUD as to their inquiry regarding the repayment of the Flexible Subsidy Loan. Effect of Potential Effect: Based on the literal terms of the Flexible Subsidy Loan, the Agency appears to be in default as it has not established repayment with HUD. Auditor non-compliance code: S Amount of questioned costs: $0 Reporting Views of Responsible Officials: We continue to follow up, as we diligently have over many recent months, starting in 2008. Most recently, via an attorney, who, like Pilgrim Towers, has not been able to elicit any response from HUD to resolve this matter. FHA/Contract number: CT26M000251 Questioned Costs: $0 Context: It has been brought to the Agency's attention that the repayment of the HUD Section 202 mortgage that they would need to contact their HUD field representative regarding repayment of the Flexible Subsidy Loan. Recommendation: We recommend that the Agency follow up with its HUD field representative to determine the next steps regarding the repayment terms of the Flexible Subsidy Loan. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Pilgrim Towers, Inc. concurs with the audit finding. The Board of Directors is in communication with HUD to negotiate repayment terms. Response Indicator: A Completion date of proposed recommendation: December 31, 2023 Response: We continue to follow up, as we diligently have over many recent months, starting in 2008. Most recently, via an attorney, who, like Pilgrim Towers, has not been able to elicit any response from HUD to resolve this matter.
Finding 2022-001
Finding reference number: 2022-001 Title and CFDA: Flexible Subsidy Loan 14.164 Type of Finding: FA Finding resolution status: In process Identification of repeat finding: 2021-002 Criteria: The Flexible Subsidy Loan "Residual Receipts Note" clause 3(a) cites that the entire principal together with interest is immediately due and payable when the HUD Section 202 mortgage is paid off. Statement of Condition: During our audit for the year ended December 31, 2021, we inquired and requested documentation regarding the repayment status of the Flexible Subsidy Loan from the Agency's officers and from its management company. The Agency did not have documentation regarding the mortgage status of the Flexible Subsidy Loan available since the HUD Section 202 mortgage was paid off in November 2016. Cause: The Agency is waiting for a response from HUD as to their inquiry regarding the repayment of the Flexible Subsidy Loan. Effect of Potential Effect: Based on the literal terms of the Flexible Subsidy Loan, the Agency appears to be in default as it has not established repayment with HUD. Auditor non-compliance code: S Amount of questioned costs: $0 Reporting Views of Responsible Officials: We continue to follow up, as we diligently have over many recent months, starting in 2008. Most recently, via an attorney, who, like Pilgrim Towers, has not been able to elicit any response from HUD to resolve this matter. FHA/Contract number: CT26M000251 Questioned Costs: $0 Context: It has been brought to the Agency's attention that the repayment of the HUD Section 202 mortgage that they would need to contact their HUD field representative regarding repayment of the Flexible Subsidy Loan. Recommendation: We recommend that the Agency follow up with its HUD field representative to determine the next steps regarding the repayment terms of the Flexible Subsidy Loan. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Pilgrim Towers, Inc. concurs with the audit finding. The Board of Directors is in communication with HUD to negotiate repayment terms. Response Indicator: A Completion date of proposed recommendation: December 31, 2023 Response: We continue to follow up, as we diligently have over many recent months, starting in 2008. Most recently, via an attorney, who, like Pilgrim Towers, has not been able to elicit any response from HUD to resolve this matter.