FAC Explorer

Audit 19476

FY End
2022-12-31
Total Expended
$1.32M
Findings
6
Programs
3
Organization: Highland House, Inc. 023-Eh-276 (MA)
Year: 2022 Accepted: 2023-09-24
Auditor: Burkhart Pizzanelli PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
22771 2022-001 - - E
22772 2022-002 - - C
22773 2022-003 - - C
599213 2022-001 - - E
599214 2022-002 - - C
599215 2022-003 - - C

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly (section 202 Direct Loan) $781,948 Yes 3
14.195 Section 8 Housing Assistance Payments Program $535,120 - 0
14.195 Covid-19 Supplemental Payments $7,229 - 0

Contacts

Name Title Type
LPKJCXR7USV4 Bryan Joyce Auditee
4135254321 Julie Quink Auditor
No contacts on file

Notes to SEFA

Title: DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: The schedule of expenditures of federal awards is prepared 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. The Project did not pass-through any federal funds to a subrecipient in 2022. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Section 202 Direct Loan is presented as of January 1, 2022. The Section 202 Direct Loan balance as of December 31, 2022 was $658,171.
Title: BASIS OF PRESENTATION Accounting Policies: The schedule of expenditures of federal awards is prepared 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. The Project did not pass-through any federal funds to a subrecipient in 2022. 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 grant activity of Highland House, Inc., HUD Project No. 023-EH-276. 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 Highland House, Inc., HUD Project No. 023-EH-276, it is not intended to and does not present the financial position, change in net assets, or cash flows of Highland House, Inc., HUD Project No. 023-EH-276.

Finding Details

Finding 2022-001
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-001: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, was a tenant who moved in during the year and management did not properly date and time-stamp the application. CRITERIA HUD Handbook 7465.1 Revision 2 for HUD Subsidized Multifamily Housing Programs requires the tenant applications to be dated and time-stamped. EFFECT OF CONDITION The tenant application was not properly dated and time-stamped. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, one tenant was a new move-in. The tenant application did not contain the required date and time-stamp. CAUSE OF CONDITION Management mistakenly did not ensure the application was dated and time-stamped. RECOMMENDATION The auditor recommends ensuring all tenant applications are dated and time-stamped when they are submitted. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring the proper use of the date and time-stamp on all tenant applications.
Finding 2022-002
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-002: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, did not refund a security deposit within thirty days of the tenant moving out. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to refund the tenant?s security deposit within thirty days after the move out date. EFFECT OF CONDITION The tenant was not refunded their security deposit within thirty days of their move out. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, one tenant was a move-out and was not refunded their security deposit within thirty days of the move out date. CAUSE OF CONDITION Management mistakenly did not ensure the security deposit was refunded within thirty days of the tenant moving out. RECOMMENDATION The auditor recommends implementing greater oversight over HUD tenant compliance and proper employee training on HUD move out procedures. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor tenant move outs to ensure security deposits are refunded within the thirty-day period specified by HUD and review the HUD move out procedures with their employees.
Finding 2022-003
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-003: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION The Project submitted the same invoice of $1,607 twice for a withdrawal from the reserve for replacement account during the year. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to only withdraw funds from the reserve for replacement account that are appropriately approved by HUD through a formal request. EFFECT OF CONDITION One invoice was inadvertently included in two separate reserve for replacement withdrawal requests that were reviewed and approved by HUD during the year resulting in a duplicate withdrawal of $1,607. CONTEXT During audit fieldwork, two reserves for replacement withdrawals were examined for compliance with HUD approval. One invoice was incorrectly included in both withdrawals for the year, making it a duplicate withdrawal. CAUSE OF CONDITION Management mistakenly included the invoice in two separate reserve for replacement withdrawal requests that were approved by HUD during the year resulting in a duplicate withdrawal of $1,607. RECOMMENDATION The auditor recommends the Project repay the $1,607 into the reserve for replacement account in 2023. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor reserve for replacement withdrawals and will repay the $1,607 into the reserve for replacement account in 2023.
Finding 2022-001
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-001: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, was a tenant who moved in during the year and management did not properly date and time-stamp the application. CRITERIA HUD Handbook 7465.1 Revision 2 for HUD Subsidized Multifamily Housing Programs requires the tenant applications to be dated and time-stamped. EFFECT OF CONDITION The tenant application was not properly dated and time-stamped. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, one tenant was a new move-in. The tenant application did not contain the required date and time-stamp. CAUSE OF CONDITION Management mistakenly did not ensure the application was dated and time-stamped. RECOMMENDATION The auditor recommends ensuring all tenant applications are dated and time-stamped when they are submitted. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring the proper use of the date and time-stamp on all tenant applications.
Finding 2022-002
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-002: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, did not refund a security deposit within thirty days of the tenant moving out. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to refund the tenant?s security deposit within thirty days after the move out date. EFFECT OF CONDITION The tenant was not refunded their security deposit within thirty days of their move out. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, one tenant was a move-out and was not refunded their security deposit within thirty days of the move out date. CAUSE OF CONDITION Management mistakenly did not ensure the security deposit was refunded within thirty days of the tenant moving out. RECOMMENDATION The auditor recommends implementing greater oversight over HUD tenant compliance and proper employee training on HUD move out procedures. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor tenant move outs to ensure security deposits are refunded within the thirty-day period specified by HUD and review the HUD move out procedures with their employees.
Finding 2022-003
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-003: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION The Project submitted the same invoice of $1,607 twice for a withdrawal from the reserve for replacement account during the year. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to only withdraw funds from the reserve for replacement account that are appropriately approved by HUD through a formal request. EFFECT OF CONDITION One invoice was inadvertently included in two separate reserve for replacement withdrawal requests that were reviewed and approved by HUD during the year resulting in a duplicate withdrawal of $1,607. CONTEXT During audit fieldwork, two reserves for replacement withdrawals were examined for compliance with HUD approval. One invoice was incorrectly included in both withdrawals for the year, making it a duplicate withdrawal. CAUSE OF CONDITION Management mistakenly included the invoice in two separate reserve for replacement withdrawal requests that were approved by HUD during the year resulting in a duplicate withdrawal of $1,607. RECOMMENDATION The auditor recommends the Project repay the $1,607 into the reserve for replacement account in 2023. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor reserve for replacement withdrawals and will repay the $1,607 into the reserve for replacement account in 2023.