FAC Explorer

Audit 1790

FY End
2023-06-30
Total Expended
$4.05M
Findings
2
Programs
1
Organization: Senior Residence at Kapolei 2, Inc. (HI)
Year: 2023 Accepted: 2023-10-30
Auditor: N&k CPAS INC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
948 2023-001 - - N
577390 2023-001 - - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $92,663 Yes 0

Contacts

Name Title Type
WWQ3ATKZWHK4 Audrey Awaya Auditee
8085235681 John Bautista Auditor
No contacts on file

Notes to SEFA

Title: NOTE D - CAPITAL ADVANCES AND LOANS Accounting Policies: NOTE B - SUMMARY OF SIGNIFICANT 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 auditee did not use the de minimis cost rate. The federal expenditures presented in the Schedule for capital advances is the balance of advances from previous years for which compliance requirements continue. At June 30, 2023, the outstanding capital advance totaled $3,952,500.
Title: NOTE A - BASIS OF PRESENTATION Accounting Policies: NOTE B - SUMMARY OF SIGNIFICANT 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 auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Senior Residence at Kapolei 2, Inc. (Company) under programs of the federal government for the fiscal year ended June 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 Company, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Company.

Finding Details

Finding 2023-001
Criteria: The ‘Consolidated Audit Guide for Audits of HUD Programs’ states that any surplus cash as calculated under HUD guidelines in the project funds accounts (including earned interest) at the end of the fiscal year shall be deposited in a federally insured residual receipts account within 90 days following the end of the fiscal year. Condition: The Company did not make the required deposit of $13,380 in surplus cash based on the June 30, 2022 residual receipts calculation. Cause: The Company deposited surplus cash of $1,338 in the residual receipt account which is the remaining surplus cash after deducting the amount to be paid for the Company’s second mortgage. The Company’s second mortgage requires payments from 90% of annual residual receipts of the Project. Effect: The Company did not deposit the full amount of required residual receipts for fiscal year 2022. HUD may provide written notice of a violation on the agreement. If corrective action is not taken, HUD may declare a default of the Capital Advance Program Regulatory Agreement. $ -- Recommendation The Company should ensure that it makes the full required residual receipt deposit before calculating the payments for other purposes. The company should also transfer the remaining balance of $12,042 to the residual receipts account for fiscal year 2022. Management’s Response The Company agrees with the finding and the recommendation. See Part VI Corrective Action Plan.
Finding 2023-001
Criteria: The ‘Consolidated Audit Guide for Audits of HUD Programs’ states that any surplus cash as calculated under HUD guidelines in the project funds accounts (including earned interest) at the end of the fiscal year shall be deposited in a federally insured residual receipts account within 90 days following the end of the fiscal year. Condition: The Company did not make the required deposit of $13,380 in surplus cash based on the June 30, 2022 residual receipts calculation. Cause: The Company deposited surplus cash of $1,338 in the residual receipt account which is the remaining surplus cash after deducting the amount to be paid for the Company’s second mortgage. The Company’s second mortgage requires payments from 90% of annual residual receipts of the Project. Effect: The Company did not deposit the full amount of required residual receipts for fiscal year 2022. HUD may provide written notice of a violation on the agreement. If corrective action is not taken, HUD may declare a default of the Capital Advance Program Regulatory Agreement. $ -- Recommendation The Company should ensure that it makes the full required residual receipt deposit before calculating the payments for other purposes. The company should also transfer the remaining balance of $12,042 to the residual receipts account for fiscal year 2022. Management’s Response The Company agrees with the finding and the recommendation. See Part VI Corrective Action Plan.