Audit 19286

FY End

2022-12-31

Total Expended

$4.53M

Findings

2

Programs

1

Organization: New Community Urban Renewal Corporation (NJ)

Year: 2022 Accepted: 2023-08-15

Auditor: Withumsmith+brown PC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
25951	2022-001	Material Weakness	Yes	P
602393	2022-001	Material Weakness	Yes	P

ALN	Program	Spent	Major	Findings
14.129	Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities	$4.53M	Yes	1

Contacts

Name	Title	Type
XQGLGKXJL8X8	Elizabeth Mbakaya	Auditee
9736232800	Michael Pintabone	Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: 1.BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of New Community Urban Renewal Corporation (the "Corporation" or the Project) under programs of the federal government for the year ended December 31, 2021. 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 Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Corporation.2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accounting principles generally accepted in the United States of America 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 shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.3. LOANS/LOANS GUARANTEE OUTSTANDING BALANCEThe Project is financed by a mortgage loan guaranteed by the U.S. Department of Housing and Urban Development with balances and transactions relating to this program included within the Projects base financial statements. The loan outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule with the remaining balance in the amount of $4,065,921 as of December 31, 2022. 4.INDIRECT COSTSThe Corporation has not previously received a negotiated indirect cost rate, nor has it elected to use the 10 percent de minimus indirect cost rate allowable under Uniform Guidance.5.SUBRECIPIENTSThe Corporation provided no federal awards to subrecipients for the year ended December 31, 2022. The mortgage insured nursing homes program listed subsequently are administered directly by the U.S. Department of Housing and Urban Development, and balances and are transactions relating to these programs are included in New Community Urban Renewal Corporations basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at December 31, 2022 consists of: Assistance Listing Number - 14.129; Program Name - Mortgage Insurance Nursing Homes; Outstanding Balance at December 31, 2022 $4,525,153 De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. MORTGAGE INSURANCE_NURSING HOMES, INTERMEDIATE CARE FACILITIES, BOARD AND CARE HOMES AND ASSISTED LIVING FACILITIES (14.129) - Balances outstanding at the end of the audit period were $4,525,153.

Finding Details

Finding 2022-001

Assistance Listing Number 14.129 HUD Sections 232 and 233 ? Mortgage obligations Finding No. 2022-001 See Finding No. 2022-001 within Section 3. Criteria In accordance with the HUD regulatory agreement, New Community Urban Renewal Corporation may not, without prior written approval, assign, transfer, dispose of, or encumber any personal property of the project, including rent, and shall not disburse or pay out any funds except for usual operating expenses and necessary repairs. Condition New Community Urban Renewal Corporation has unauthorized loans of $1,871,220 to New Community Healthcare, Inc. as of December 31, 2022. Cause The amount due from New Community Healthcare, Inc. predominately dates back prior to 2003 and is believed to be the result of unpaid rents and potentially loans from the New Community Urban Renewal Corporation?s reserve for repairs and replacement. Effect New Community Urban Renewal Corporation is in violation of the HUD regulatory agreement. Identification as Repeat Finding Yes, refer to finding No.2022-001 Recommendation We recommend New Community Urban Renewal Corporation continues to regularly monitor its strict compliance with each aspect of the plan of compliance. Management?s Response New Community Urban Renewal Corporation and HUD have agreed to a plan of compliance requiring, among other things, restitution payments of not less than $150,000 per year through 2024. The required restitution payment for 2022 was made. Questioned Costs None identified.

Finding 2022-001

Assistance Listing Number 14.129 HUD Sections 232 and 233 ? Mortgage obligations Finding No. 2022-001 See Finding No. 2022-001 within Section 3. Criteria In accordance with the HUD regulatory agreement, New Community Urban Renewal Corporation may not, without prior written approval, assign, transfer, dispose of, or encumber any personal property of the project, including rent, and shall not disburse or pay out any funds except for usual operating expenses and necessary repairs. Condition New Community Urban Renewal Corporation has unauthorized loans of $1,871,220 to New Community Healthcare, Inc. as of December 31, 2022. Cause The amount due from New Community Healthcare, Inc. predominately dates back prior to 2003 and is believed to be the result of unpaid rents and potentially loans from the New Community Urban Renewal Corporation?s reserve for repairs and replacement. Effect New Community Urban Renewal Corporation is in violation of the HUD regulatory agreement. Identification as Repeat Finding Yes, refer to finding No.2022-001 Recommendation We recommend New Community Urban Renewal Corporation continues to regularly monitor its strict compliance with each aspect of the plan of compliance. Management?s Response New Community Urban Renewal Corporation and HUD have agreed to a plan of compliance requiring, among other things, restitution payments of not less than $150,000 per year through 2024. The required restitution payment for 2022 was made. Questioned Costs None identified.