Audit 1882

FY End
2023-06-30
Total Expended
$2.24M
Findings
2
Programs
2
Organization: Kenwood Place I, Inc. (IN)
Year: 2023 Accepted: 2023-10-31

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
990 2023-001 - Yes B
577432 2023-001 - Yes B

Contacts

Name Title Type
RJMFKN2XSGW8 Michael Nichipor Auditee
3178054312 Scott A. Thoman 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. Kenwood Place I, Inc., has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. 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 includes the federal award activity of Kenwood Place I, Inc., and is presented on the accrual basis of accounting. 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 Kenwood Place I, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Kenwood Place I, Inc.
Title: NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Kenwood Place I, Inc., has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. 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. Kenwood Place I, Inc., has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 3 - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM 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. Kenwood Place I, Inc., has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Kenwood Place I, Inc., has received a U.S. Department of Housing and Urban Development direct loan under Section 223(f) 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. Kenwood Place I, Inc., received no additional loans during the year. The balance of the loan outstanding at June 30, 2023 consists of: $1,784,897.

Finding Details

Criteria: Pursuant to the Regulatory Agreement, monthly deposits to a reserve for replacement account must be made in the amount established by HUD. Statement of Condition: Replacement reserve deposits in the amount of $1,612 as of June 30, 2023, were not deposited into the account as required by the Regulatory Agreement. Cause: The mortgage servicer did not increase the monthly billings for replacement reserves on December 1, 2021 and 2022, as required by HUD. The Company failed to notice and correct this oversight. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required replacement reserve deposits. Auditor’s Non-Compliance Code: B - Owners must deposit replacement reserves monthly in the amount prescribed by HUD. Amount of Questioned Costs: $0 Reporting Views of Responsible Officials: The Company will make the delinquent deposit subsequent to year end. Context: This was not a sampling audit procedure. Recommendation: Make the required delinquent deposit to the replacement reserve account and ensure that all future deposits are made as required by the Regulatory Agreement. Auditor’s Summary of Auditee’s Comments on the Findings and Recommendations: Auditee agreed with auditor’s findings. Response Indicator: Accepted Completion Date: Open Response: Management will fund the delinquent deposit amount as soon as possible. Contact Person: Rod Ludwig
Criteria: Pursuant to the Regulatory Agreement, monthly deposits to a reserve for replacement account must be made in the amount established by HUD. Statement of Condition: Replacement reserve deposits in the amount of $1,612 as of June 30, 2023, were not deposited into the account as required by the Regulatory Agreement. Cause: The mortgage servicer did not increase the monthly billings for replacement reserves on December 1, 2021 and 2022, as required by HUD. The Company failed to notice and correct this oversight. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required replacement reserve deposits. Auditor’s Non-Compliance Code: B - Owners must deposit replacement reserves monthly in the amount prescribed by HUD. Amount of Questioned Costs: $0 Reporting Views of Responsible Officials: The Company will make the delinquent deposit subsequent to year end. Context: This was not a sampling audit procedure. Recommendation: Make the required delinquent deposit to the replacement reserve account and ensure that all future deposits are made as required by the Regulatory Agreement. Auditor’s Summary of Auditee’s Comments on the Findings and Recommendations: Auditee agreed with auditor’s findings. Response Indicator: Accepted Completion Date: Open Response: Management will fund the delinquent deposit amount as soon as possible. Contact Person: Rod Ludwig