FAC Explorer

Audit 20833

FY End
2022-03-31
Total Expended
$1.76M
Findings
2
Programs
1
Organization: Jfm No. 3 Corp. (ME)
Year: 2022 Accepted: 2022-10-11
Auditor: Ouellette & Associates PA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
20748 2022-001 - - J
597190 2022-001 - - J

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $103,265 Yes 1

Contacts

Name Title Type
EN3SNPQRRUN5 Andrew Cowan Auditee
2074406213 Keith Morin Auditor
No contacts on file

Notes to SEFA

Title: NOTE C - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of JFM No. 3 Corp., HUD Project No. 024-HD058, 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 JFM No. 3 Corp., it is not intended to and does not present the financial position, changes in net assets, or cash flows from JFM No. 3 Corp. De Minimis Rate Used: N Rate Explanation: NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. JFM No. 3 Corp. has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. JFM No. 3 Corp. has received a U.S. Department of Housing and Urban Development direct loan under Section 811 of the National Housing Act. The loan balance outstanding at the beginning of the period is included in the federal expenditures presented in the Schedule. JFM No. 3 Corp. received no additional loans during the period. The balance of the loan outstanding at March 31, 2022 consists of: Outstanding Balance atCFDA Number Program Name March 31, 202214.181Section 811 Capital Advance$1,654,400

Finding Details

Finding 2022-001
Finding No 2022-001: Section 811, CFDA 14.181 Condition: PRAC rental receipts were higher than the amount allowed based on income limits. Criteria: The rent calculation is based on the tenant paying 30% of their average annual income and HUD paying the difference between the tenant portion and the PRAC approved rent. Effect: Violations may require JFM No. 3 Corp. to return PRAC rental receipts or PRAC rental receipts may be reduced in future years. Context: Rent received for each tenant from HUD is updated annually. The calculated portion is adjusted annually based on the tenant?s income, which determines the amount of assistance to be paid by HUD. Cause: HUD was inadvertently charged a higher rate for their monthly portion of the total rent which was calculated based on tenant income. Recommendation: Rent charged should be based on the approved calculation based on tenant income. A review process should be implemented to verify that the rent calculation is prepared correctly. Views of Responsible Officials: Management agrees with the finding. The rent was calculated by the management agent incorrectly causing the tenant to be undercharged and HUD overcharged. The management agent discovered the error during the recertification process and worked to correct the error. This issue was resolved with the April 2022 HAP.
Finding 2022-001
Finding No 2022-001: Section 811, CFDA 14.181 Condition: PRAC rental receipts were higher than the amount allowed based on income limits. Criteria: The rent calculation is based on the tenant paying 30% of their average annual income and HUD paying the difference between the tenant portion and the PRAC approved rent. Effect: Violations may require JFM No. 3 Corp. to return PRAC rental receipts or PRAC rental receipts may be reduced in future years. Context: Rent received for each tenant from HUD is updated annually. The calculated portion is adjusted annually based on the tenant?s income, which determines the amount of assistance to be paid by HUD. Cause: HUD was inadvertently charged a higher rate for their monthly portion of the total rent which was calculated based on tenant income. Recommendation: Rent charged should be based on the approved calculation based on tenant income. A review process should be implemented to verify that the rent calculation is prepared correctly. Views of Responsible Officials: Management agrees with the finding. The rent was calculated by the management agent incorrectly causing the tenant to be undercharged and HUD overcharged. The management agent discovered the error during the recertification process and worked to correct the error. This issue was resolved with the April 2022 HAP.