FAC Explorer

Audit 24844

FY End
2022-12-31
Total Expended
$792,759
Findings
2
Programs
3
Organization: Central Minnesota Housing Partnership, Inc. (MN)
Year: 2022 Accepted: 2023-09-07
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
30409 2022-003 Significant Deficiency - N
606851 2022-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $658,364 Yes 1
14.267 Continuum of Care Program $101,621 - 0
10.427 Rural Rental Assistance Payments $32,774 - 0

Contacts

Name Title Type
UHWXM5TPP5H3 Deanna Hemmesch Auditee
3202590393 Nicole Folkerts Auditor
No contacts on file

Notes to SEFA

Title: RURAL RENTAL HOUSING LOANS Accounting Policies: NOTE 1 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Central Minnesota Housing Partnership, Inc. under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of 2 CFR 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 Central Minnesota Housing Partnership, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Central Minnesota Housing Partnership, Inc. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Central Minnesota Housing Partnership, Inc. has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization did not have any payments to subrecipients during the year ended December 31, 2022. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The rural rental housing loans programs listed subsequently are administered directly by Central Minnesota Housing Partnership, Inc. and balances and transactions relating to these programs are included in Central Minnesota Housing Partnership, Inc.s basic consolidated financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at December 31, 2022 consists of: FEDERAL LOAN PROGRAMS: Program Title - Rural Rental Housing Loans FAL Number - 10.415 Amount Outstanding - $633.020

Finding Details

Finding 2022-003
Federal Agency: U.S. Department of Agriculture Federal Program Title: Rural Rental Housing Loans Federal Assistance Listing Number: 10.415 Federal Award Identification Number(s) and Year(s): AMAS000000191197-2018, AMAS000000191198-2018, AMAS000000315075-2018, AMAS000000017172-2017 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 01/01/22 to 12/31/22 Type of Finding: ? Significant Deficiency in Internal Control over Major Federal Programs Criteria or Specific Requirement: Funds collected as a security deposit shall be kept separate from other funds and shall remain equal to or exceed outstanding security deposit obligations. Condition: During our testing of the six Rural Development projects, we noted four had underfunded security deposit assets in relation to the security deposit liability. Questioned Costs: $1,011 Context: Each of the six Rural Development projects were reviewed to ensure proper funding over security deposits, and four were noted to be underfunded. Cause: During the tracking of security deposits, long-term tenants accrued interest at higher rates over time, resulting in a larger than expected interest accrual, which management did not prepare for, resulting in those projects to be underfunded (the security deposit cash is less than the liability). Effect: Potential for insufficient funds to remit all security deposits to tenants. Repeat Finding: No. Recommendation: The Organization should ensure the security deposit asset is equal to or greater than the security deposit liability in the event that any or all security deposits are required to be returned to tenants to ensure the Organization would have sufficient funding to do so. Views of Responsible Officials and Planned Corrective Actions: No disagreement with the finding. The Organization will implement a review step during the tracking of security deposits to verify the security deposit asset is equal to or greater than the security deposit liability and will correct any that are underfunded.
Finding 2022-003
Federal Agency: U.S. Department of Agriculture Federal Program Title: Rural Rental Housing Loans Federal Assistance Listing Number: 10.415 Federal Award Identification Number(s) and Year(s): AMAS000000191197-2018, AMAS000000191198-2018, AMAS000000315075-2018, AMAS000000017172-2017 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 01/01/22 to 12/31/22 Type of Finding: ? Significant Deficiency in Internal Control over Major Federal Programs Criteria or Specific Requirement: Funds collected as a security deposit shall be kept separate from other funds and shall remain equal to or exceed outstanding security deposit obligations. Condition: During our testing of the six Rural Development projects, we noted four had underfunded security deposit assets in relation to the security deposit liability. Questioned Costs: $1,011 Context: Each of the six Rural Development projects were reviewed to ensure proper funding over security deposits, and four were noted to be underfunded. Cause: During the tracking of security deposits, long-term tenants accrued interest at higher rates over time, resulting in a larger than expected interest accrual, which management did not prepare for, resulting in those projects to be underfunded (the security deposit cash is less than the liability). Effect: Potential for insufficient funds to remit all security deposits to tenants. Repeat Finding: No. Recommendation: The Organization should ensure the security deposit asset is equal to or greater than the security deposit liability in the event that any or all security deposits are required to be returned to tenants to ensure the Organization would have sufficient funding to do so. Views of Responsible Officials and Planned Corrective Actions: No disagreement with the finding. The Organization will implement a review step during the tracking of security deposits to verify the security deposit asset is equal to or greater than the security deposit liability and will correct any that are underfunded.