Audit 25536

FY End
2022-12-31
Total Expended
$2.93M
Findings
2
Programs
3
Year: 2022 Accepted: 2023-04-18

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
30415 2022-002 Significant Deficiency Yes L
606857 2022-002 Significant Deficiency Yes L

Programs

Contacts

Name Title Type
CV6UCJCKY613 Nicole Chwala Auditee
9202064926 Dawn Yarrington Auditor
No contacts on file

Notes to SEFA

Title: FEDERAL LOAN PROGRAM Accounting Policies: BASIS OF PRESENTATION: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the ILI Senior Housing - Chapel Valley Road, 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the financial statements.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Corporation has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule related to the U.S. Department of Housing and Urban Development capital advance under Section 202 of the Housing Act of 1959 and a Community Development Block Grants/Entitlement Grant loan. Loans outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding as of December 31, 2022 consists of: COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - $194,904. SUPPORTIVE HOUSING FOR THE ELDERLY SECTION 202 CAPITAL ADVANCE (14.157) - $2,531,700.
Title: SUBRECIPIENTS Accounting Policies: BASIS OF PRESENTATION: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the ILI Senior Housing - Chapel Valley Road, 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the financial statements.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Corporation has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Of the federal expenditures presented in the Schedule, the Corporation did not provide federal awards to subrecipients during the year ended December 31, 2022.

Finding Details

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 24 U.S. Code of Federal Regulations, Section 891.400 and the Corporation's Regulatory Agreement residual receipts to be deposited to a restricted account. The Consolidated Appropriations Act, 2016 (P.L. 114-113) provided statutory authority for HUD to continue collection of excess residual receipt account balances. To the extent that residual receipts are available to a project, owners are allowed an initial residual receipts balance in an amount equivalent to $250 per unit to use for project purposes. On May 1, 2019, HUD communicated to management that excess residual receipts must be remitted to HUD upon expiration of the Project Rental Assistance Contract (PRAC). Condition: The PRAC expired on December 6, 2019, and excess residual receipts have not been remitted to HUD. Questioned costs: None Context: Noncompliance was not identified as a result of sampling. A total of $128,613 payable to HUD was computed based on the PRAC and as noted in the prior year audit findings and questions costs. Cause: The Corporation changed its management agent during the year and the recapture requirement was not communicated to staff of the new management agent. Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management remit excess residual receipts to HUD. We recommend that the residual receipts account be evaluated for excess residual receipts upon expiration of each annual PRAC. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 24 U.S. Code of Federal Regulations, Section 891.400 and the Corporation's Regulatory Agreement residual receipts to be deposited to a restricted account. The Consolidated Appropriations Act, 2016 (P.L. 114-113) provided statutory authority for HUD to continue collection of excess residual receipt account balances. To the extent that residual receipts are available to a project, owners are allowed an initial residual receipts balance in an amount equivalent to $250 per unit to use for project purposes. On May 1, 2019, HUD communicated to management that excess residual receipts must be remitted to HUD upon expiration of the Project Rental Assistance Contract (PRAC). Condition: The PRAC expired on December 6, 2019, and excess residual receipts have not been remitted to HUD. Questioned costs: None Context: Noncompliance was not identified as a result of sampling. A total of $128,613 payable to HUD was computed based on the PRAC and as noted in the prior year audit findings and questions costs. Cause: The Corporation changed its management agent during the year and the recapture requirement was not communicated to staff of the new management agent. Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management remit excess residual receipts to HUD. We recommend that the residual receipts account be evaluated for excess residual receipts upon expiration of each annual PRAC. Views of responsible officials: Management agrees with the finding.