Audit 22990

FY End

2022-09-30

Total Expended

$7.62M

Findings

4

Programs

1

Organization: Berean Housing Development Fund Co., Inc. (NY)

Year: 2022 Accepted: 2023-07-06

Auditor: Galleros Robinson Certified Public Accountants LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
22896	2022-001	-	Yes	N
22897	2022-001	-	Yes	N
599338	2022-001	-	Yes	N
599339	2022-001	-	Yes	N

ALN	Program	Spent	Major	Findings
14.157	Supportive Housing for the Elderly	$866,269	Yes	1

Contacts

Name	Title	Type
MX9AY5UZK3L1	Peggie J. Waddell	Auditee
2126655500	Leonora Galleros	Auditor
No contacts on file

Notes to SEFA

Title: Federal Loan Program Accounting Policies: The accompanying schedule of expenditures of federal awards includes the Federal award activity of Berean Housing Development Co., Inc., under programs of the federal government for the year ended September 30, 2022 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 Berean Housing Development Co., Inc. (A Nonprofit Housing Corporation), (the Project), it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Project. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The federal loan program listed on the schedule of expenditures of federal awards is administered directly by the Project and balances and transactions relating to the programs are included in the Projects basic financial statements. Since there was no loan activity during 2022, the loan outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule.

Finding Details

Finding 2022-001

2022-001 Reserve for Replacement CFDA #14.157 Supportive Housing for the Elderly - Section 202 Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - Project failed to fund the required replacement reserve for twelve (12) months. Cause - The Project?s cash flow deficiency was the main reason for the noncompliance. Effect - Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost - None. Context - Failure to make required replacement reserve for twelve (12) months. Recommendation - We recommend that the Organization communicate the cash flow issue with HUD and implement a plan on how the Organization can fund its replacement reserve. View of Responsible Official and Planned Corrective Action - We will complete the deposit for the next several months as funds were not sufficient to cover the required deposits then.

Finding 2022-001

2022-001 Reserve for Replacement CFDA #14.157 Supportive Housing for the Elderly - Section 202 Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - Project failed to fund the required replacement reserve for twelve (12) months. Cause - The Project?s cash flow deficiency was the main reason for the noncompliance. Effect - Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost - None. Context - Failure to make required replacement reserve for twelve (12) months. Recommendation - We recommend that the Organization communicate the cash flow issue with HUD and implement a plan on how the Organization can fund its replacement reserve. View of Responsible Official and Planned Corrective Action - We will complete the deposit for the next several months as funds were not sufficient to cover the required deposits then.

Finding 2022-001

2022-001 Reserve for Replacement CFDA #14.157 Supportive Housing for the Elderly - Section 202 Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - Project failed to fund the required replacement reserve for twelve (12) months. Cause - The Project?s cash flow deficiency was the main reason for the noncompliance. Effect - Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost - None. Context - Failure to make required replacement reserve for twelve (12) months. Recommendation - We recommend that the Organization communicate the cash flow issue with HUD and implement a plan on how the Organization can fund its replacement reserve. View of Responsible Official and Planned Corrective Action - We will complete the deposit for the next several months as funds were not sufficient to cover the required deposits then.

Finding 2022-001

2022-001 Reserve for Replacement CFDA #14.157 Supportive Housing for the Elderly - Section 202 Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - Project failed to fund the required replacement reserve for twelve (12) months. Cause - The Project?s cash flow deficiency was the main reason for the noncompliance. Effect - Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost - None. Context - Failure to make required replacement reserve for twelve (12) months. Recommendation - We recommend that the Organization communicate the cash flow issue with HUD and implement a plan on how the Organization can fund its replacement reserve. View of Responsible Official and Planned Corrective Action - We will complete the deposit for the next several months as funds were not sufficient to cover the required deposits then.