Audit 256

FY End
2023-06-30
Total Expended
$3.21M
Findings
4
Programs
2
Organization: Oak Haven Apartments (TX)
Year: 2023 Accepted: 2023-10-18

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
176 2023-001 Significant Deficiency - P
177 2023-001 Significant Deficiency - P
576618 2023-001 Significant Deficiency - P
576619 2023-001 Significant Deficiency - P

Contacts

Name Title Type
EXAHA8KPBU87 Nannette Vallis Auditee
2812987999 Nancy MacK Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Oak Haven Apartments, HUD Project No. 114-11304, 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 (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 the Project, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Project.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported in 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 reimbursements.
Title: HUD INSURED LOAN Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project refinanced into a HUD insured loan under section 223(f) of the National Housing Act effective March 1, 2011. The loan balance at the beginning of the year is included in the schedule of expenditures of federal awards. The Project has received no additional funds during the year. The loan is reported as a liability in the statement of financial position. The balance of the loan as of June 30, 2023 amounts to $2,599,296.
Title: INDIRECT COST RATE Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Findings reference number: 2023-001 TItle and AL Number of Federal Program: Section 8 Housing Assistance (AL 14.195) Type of finding: Internal control Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No Condition: Recertifications for tenants were not properly updated in the rent roll. Criteria: The accounting records should reflect the proper breakout between HUD and tenant rent. Effect: The breakout of total rental income between HUD subsidy and tenant rent was incorrect and had to be adjusted. Context: Upon recertification, the tenant and HUD rent were adjusted and both tenant and HUD were paying the correct amounts per the recertification, however the accounting records (rent roll) was not updated for the recertification. The total rent was correct, however reclassifications had to be made in the general ledger to properly reflect the payments made. Cause: Oversight by the property manager. Noncompliance code: S. Internal control deficiency Questioned costs: None. Reporting views of officials: Management agrees with the finding. Contract number: 114-11304. Recommendation: Upon recertification, rent roll should be updated to properly reflect the breakout between tenant and HUD rent. Views of Responsible Officials and Planned Corrective Actions:: Management is in agreement and have accepted the proposed reclassification journal entries to record in the general ledger. The property manager will be trained to update the accounting records upon recertification. Completion date: 6/30/2024
Findings reference number: 2023-001 TItle and AL Number of Federal Program: Section 8 Housing Assistance (AL 14.195) Type of finding: Internal control Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No Condition: Recertifications for tenants were not properly updated in the rent roll. Criteria: The accounting records should reflect the proper breakout between HUD and tenant rent. Effect: The breakout of total rental income between HUD subsidy and tenant rent was incorrect and had to be adjusted. Context: Upon recertification, the tenant and HUD rent were adjusted and both tenant and HUD were paying the correct amounts per the recertification, however the accounting records (rent roll) was not updated for the recertification. The total rent was correct, however reclassifications had to be made in the general ledger to properly reflect the payments made. Cause: Oversight by the property manager. Noncompliance code: S. Internal control deficiency Questioned costs: None. Reporting views of officials: Management agrees with the finding. Contract number: 114-11304. Recommendation: Upon recertification, rent roll should be updated to properly reflect the breakout between tenant and HUD rent. Views of Responsible Officials and Planned Corrective Actions:: Management is in agreement and have accepted the proposed reclassification journal entries to record in the general ledger. The property manager will be trained to update the accounting records upon recertification. Completion date: 6/30/2024
Findings reference number: 2023-001 TItle and AL Number of Federal Program: Section 8 Housing Assistance (AL 14.195) Type of finding: Internal control Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No Condition: Recertifications for tenants were not properly updated in the rent roll. Criteria: The accounting records should reflect the proper breakout between HUD and tenant rent. Effect: The breakout of total rental income between HUD subsidy and tenant rent was incorrect and had to be adjusted. Context: Upon recertification, the tenant and HUD rent were adjusted and both tenant and HUD were paying the correct amounts per the recertification, however the accounting records (rent roll) was not updated for the recertification. The total rent was correct, however reclassifications had to be made in the general ledger to properly reflect the payments made. Cause: Oversight by the property manager. Noncompliance code: S. Internal control deficiency Questioned costs: None. Reporting views of officials: Management agrees with the finding. Contract number: 114-11304. Recommendation: Upon recertification, rent roll should be updated to properly reflect the breakout between tenant and HUD rent. Views of Responsible Officials and Planned Corrective Actions:: Management is in agreement and have accepted the proposed reclassification journal entries to record in the general ledger. The property manager will be trained to update the accounting records upon recertification. Completion date: 6/30/2024
Findings reference number: 2023-001 TItle and AL Number of Federal Program: Section 8 Housing Assistance (AL 14.195) Type of finding: Internal control Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No Condition: Recertifications for tenants were not properly updated in the rent roll. Criteria: The accounting records should reflect the proper breakout between HUD and tenant rent. Effect: The breakout of total rental income between HUD subsidy and tenant rent was incorrect and had to be adjusted. Context: Upon recertification, the tenant and HUD rent were adjusted and both tenant and HUD were paying the correct amounts per the recertification, however the accounting records (rent roll) was not updated for the recertification. The total rent was correct, however reclassifications had to be made in the general ledger to properly reflect the payments made. Cause: Oversight by the property manager. Noncompliance code: S. Internal control deficiency Questioned costs: None. Reporting views of officials: Management agrees with the finding. Contract number: 114-11304. Recommendation: Upon recertification, rent roll should be updated to properly reflect the breakout between tenant and HUD rent. Views of Responsible Officials and Planned Corrective Actions:: Management is in agreement and have accepted the proposed reclassification journal entries to record in the general ledger. The property manager will be trained to update the accounting records upon recertification. Completion date: 6/30/2024