FAC Explorer

Audit 24770

FY End
2022-06-30
Total Expended
$2.31M
Findings
2
Programs
2
Organization: Kenwood Place I, Inc. (IN)
Year: 2022 Accepted: 2022-12-08
Auditor: Somerset CPAS PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
30549 2022-001 - Yes N
606991 2022-001 - Yes N

Programs

ALN Program Spent Major Findings
14.155 Section 223(f) of the National Housing Act $1.89M Yes 1
14.182 Section 8 Housing Assistance Payments $418,959 - 0

Contacts

Name Title Type
RJMFKN2XSGW8 Michael Nichipor Auditee
3176331861 Scott A Thoman Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal award activity of Kenwood Place I, Inc., 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 Kenwood Place I, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Kenwood PlaceI, Inc. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. SECTION 223(F) OF THE NATIONAL HOUSING ACT (14.155) - Balance outstanding at the end of the audit period were $1,840,395.

Finding Details

Finding 2022-001
Section 223(f) Loan Program, CFDA 14.155 Finding# 2022-001 Criteria: Pursuant to the Regulatory Agreement, monthly deposits to a reserve for replacement account must be made in the amount established by HUD. Statement of Condition: Replacement reserve deposits in the amount of $581 as of June 30, 2022 were not deposited into the account as required by the Regulatory Agreement. Cause: The mortgage servicer did not increase the monthly billings for replacement reserves on December 1, 2021 as required by HUD. The Company failed to notice and correct this oversight. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required replacement reserve deposits. Auditor?s Non-Compliance Code: B - Owners must deposit replacement reserves monthly in the amount prescribed by HUD. Amount of Questioned Costs: $-0- Reporting Views of Responsible Officials: The Company will make the delinquent deposit subsequent to year end. Context: This was not a sampling audit procedure. Recommendation: Make the required delinquent deposit to the replacement reserve account and ensure that all future deposits are made as required by the Regulatory Agreement. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator: Accepted Completion Date: Open Response: Management will fund the delinquent deposit amount as soon as possible. Contact Person: Rod Ludwig
Finding 2022-001
Section 223(f) Loan Program, CFDA 14.155 Finding# 2022-001 Criteria: Pursuant to the Regulatory Agreement, monthly deposits to a reserve for replacement account must be made in the amount established by HUD. Statement of Condition: Replacement reserve deposits in the amount of $581 as of June 30, 2022 were not deposited into the account as required by the Regulatory Agreement. Cause: The mortgage servicer did not increase the monthly billings for replacement reserves on December 1, 2021 as required by HUD. The Company failed to notice and correct this oversight. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required replacement reserve deposits. Auditor?s Non-Compliance Code: B - Owners must deposit replacement reserves monthly in the amount prescribed by HUD. Amount of Questioned Costs: $-0- Reporting Views of Responsible Officials: The Company will make the delinquent deposit subsequent to year end. Context: This was not a sampling audit procedure. Recommendation: Make the required delinquent deposit to the replacement reserve account and ensure that all future deposits are made as required by the Regulatory Agreement. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator: Accepted Completion Date: Open Response: Management will fund the delinquent deposit amount as soon as possible. Contact Person: Rod Ludwig