FAC Explorer

Audit 23929

FY End
2022-09-30
Total Expended
$4.70M
Findings
4
Programs
1
Organization: Pittsfield Lowry, LLC (IL)
Year: 2022 Accepted: 2023-01-24
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
34415 2022-001 - Yes F
34416 2022-002 - Yes N
610857 2022-001 - Yes F
610858 2022-002 - Yes N

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $4.70M Yes 2

Contacts

Name Title Type
G6K7CES93HJ1 Ronald J. Wilson Auditee
3093431550 Michelle Vancil Auditor
No contacts on file

Notes to SEFA

Title: Note 3. Loans Outstanding Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Pittsfield Lowry, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. 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 potion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. As of September 30, 2022, the Organization had a HUD-insured mortgage loan balance outstanding of $4,547,466.
Title: Note 4. Noncash Assistance Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Pittsfield Lowry, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. 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 potion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. There was no noncash federal assistance received by the Organization during the year.
Title: Note 5. Insurance Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Pittsfield Lowry, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. 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 potion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. The Organization maintains property and liability insurance which management believes is sufficient to meets its needs. None of the insurance is directly funded by federal awards.
Title: Note 6. Subrecipients Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Pittsfield Lowry, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. 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 potion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. The Organization did not pass-through any federal awards to subrecipients during the year ended September 30, 2022.

Finding Details

Finding 2022-001
Identifying Number: 2022-001 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 4(c): "Mortgagor shall not without the prior written approval of the Secretary [of HUD]: remodel, reconstruct, or demolish any part of the mortgaged property or subtract from any real or personal property of the project." Condition: The Organization received approval from HUD to begin the construction of a dining room and physical therapy addition to the mortgaged property. This approval was contingent on the Organization meeting certain conditions set forth by HUD. One such condition was that the total cost of the project be funded by a contribution from Community Living Options, Inc. (CLO), and that this contribution would not be paid back to CLO. The Organization has recorded a payable owed to CLO and therefore did not meet the terms of the HUD approval. Cause: The Organization did not follow the conditions of the HUD approval prior to starting the construction project of the addition to the mortgaged property. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not Applicable Context: The construction project population was tested 100%, and therefore was statistically valid. This instance is isolated to this one construction project. Repeat finding: This finding is a repeat finding (2021-001, 2020-001, 2019-001, 2018 001, 2017-001, 2016-001, 2015-001, 2014-001 and 2013-1). Recommendation: Procedures should be implemented and placed in service to ensure HUD approval, for which all conditions can be met, is obtained before any construction is started on the mortgaged property. The Organization should also obtain approval after-the-fact for the specific construction project noted above. Views of Responsible Officials: Management disagrees with finding 2022-001.
Finding 2022-002
Identifying Number: 2022-002 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 5: "The Mortgagor agrees to deposit in a residual receipts fund any residual receipts realized from the operation of the mortgaged property. No distribution from such fund shall be made without the prior written approval of the Secretary. Any distribution from such fund, which the party receiving such distribution is not entitled to retain hereunder, shall be held in trust separate and apart from any other funds." Condition: The Organization calculated surplus cash of $31,225 as of September 30, 2020. This amount was not deposited into a separate residual receipts cash account. The Organization calculated surplus cash of $39,082 as of September 30, 2021, which includes the undeposited amount from September 30, 2020. The Organization has not deposited this amount into a separate residual receipts fund account within 90 days of the year-end. Cause: Required deposit of residual receipts in a separate residual receipts fund within 90 days of year end was not made. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The population was tested 100%, therefore was statistically valid. Repeat finding: This finding is a repeat finding (2021-002). Recommendation: Procedures should be implemented and placed in service to ensure residual receipts are deposited into a separate fund within 90 days of year-end. The Organization should deposit in a separate residual receipts fund residual receipts of $39,082 realized from the operation of the mortgaged property in the prior year. Views of Responsible Officials: Management agrees with finding 2022-002.
Finding 2022-001
Identifying Number: 2022-001 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 4(c): "Mortgagor shall not without the prior written approval of the Secretary [of HUD]: remodel, reconstruct, or demolish any part of the mortgaged property or subtract from any real or personal property of the project." Condition: The Organization received approval from HUD to begin the construction of a dining room and physical therapy addition to the mortgaged property. This approval was contingent on the Organization meeting certain conditions set forth by HUD. One such condition was that the total cost of the project be funded by a contribution from Community Living Options, Inc. (CLO), and that this contribution would not be paid back to CLO. The Organization has recorded a payable owed to CLO and therefore did not meet the terms of the HUD approval. Cause: The Organization did not follow the conditions of the HUD approval prior to starting the construction project of the addition to the mortgaged property. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not Applicable Context: The construction project population was tested 100%, and therefore was statistically valid. This instance is isolated to this one construction project. Repeat finding: This finding is a repeat finding (2021-001, 2020-001, 2019-001, 2018 001, 2017-001, 2016-001, 2015-001, 2014-001 and 2013-1). Recommendation: Procedures should be implemented and placed in service to ensure HUD approval, for which all conditions can be met, is obtained before any construction is started on the mortgaged property. The Organization should also obtain approval after-the-fact for the specific construction project noted above. Views of Responsible Officials: Management disagrees with finding 2022-001.
Finding 2022-002
Identifying Number: 2022-002 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 5: "The Mortgagor agrees to deposit in a residual receipts fund any residual receipts realized from the operation of the mortgaged property. No distribution from such fund shall be made without the prior written approval of the Secretary. Any distribution from such fund, which the party receiving such distribution is not entitled to retain hereunder, shall be held in trust separate and apart from any other funds." Condition: The Organization calculated surplus cash of $31,225 as of September 30, 2020. This amount was not deposited into a separate residual receipts cash account. The Organization calculated surplus cash of $39,082 as of September 30, 2021, which includes the undeposited amount from September 30, 2020. The Organization has not deposited this amount into a separate residual receipts fund account within 90 days of the year-end. Cause: Required deposit of residual receipts in a separate residual receipts fund within 90 days of year end was not made. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The population was tested 100%, therefore was statistically valid. Repeat finding: This finding is a repeat finding (2021-002). Recommendation: Procedures should be implemented and placed in service to ensure residual receipts are deposited into a separate fund within 90 days of year-end. The Organization should deposit in a separate residual receipts fund residual receipts of $39,082 realized from the operation of the mortgaged property in the prior year. Views of Responsible Officials: Management agrees with finding 2022-002.