Audit 26071

FY End
2022-12-31
Total Expended
$1.64M
Findings
10
Programs
2
Year: 2022 Accepted: 2023-07-09

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
23595 2022-001 - Yes N
23596 2022-002 Material Weakness Yes F
23597 2022-003 - Yes N
23598 2022-004 - Yes N
23599 2022-005 - Yes FLN
600037 2022-001 - Yes N
600038 2022-002 Material Weakness Yes F
600039 2022-003 - Yes N
600040 2022-004 - Yes N
600041 2022-005 - Yes FLN

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $1.49M Yes 5
10.427 Rural Rental Assistance Payments $147,801 - 0

Contacts

Name Title Type
HCDFLBFKEDU6 Susie Kirker Auditee
4067683483 Ryan Leavitt Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 1383894.
Title: Basis of Presentation Accounting Policies: 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the City of Poplar Housing Authority 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). Because the Schedule presents only a selected portion of the activities of the Housing Authority, it is not intended to and does not present either the financial position, results of activities, changes in net assets, or cash flows of the Housing Authority.
Title: Federal Financial Assistance Accounting Policies: 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Pursuant to the Single Audit Act and Uniform Guidance, federal financial assistance is defined as assistance provided by a federal agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance or direct appropriations. Federal financial assistance does not include direct federal cash assistance to individuals.The following programs have been identified as major programs for the year ended December 31, 2022:Program RHS Loans/Interest Credit Subsidy Assistance listing number 10.415 In accordance with Uniform Guidance requirements, the RHS loan balance on the Schedule of Expenditures of Federal Awards, Assistance Listing Number 10.415 is the balance at the beginning of the year January 1, 2022. The outstanding balance of the RHS loans, Assistance Listing Number 10.415 as of December 31, 2022, is $1,383,894. Federal Indirect Rate The Housing Authority does not use the 10% de minimis cost rate.

Finding Details

FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-001 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: Edgewater Estates and Combs Memorial did not establish or adequately fund the security deposit accounts in 2022. Condition and Context: Those Projects did not maintain the full amount of security deposit funds potentially owed to the tenants. Effect: The Projects are not in compliance with RD regulations and procedures. Cause: The Projects did not maintain the full amount of security deposit funds potentially owed to the tenants. Recommendation: The Projects should fully fund the security deposit accounts for the amounts potentially owed to tenants.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-002 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Equipment and Real Property Management Questioned Costs: None Criteria: Assets recorded on the financial statements should be supported by documentation showing the original cost or purchase price. Condition and Context: The Projects did not maintain adequate documentation to support the fixed assets recorded on the financial statements. Effect: The Projects are not in compliance with RD regulations or standards which require that assets recorded on the financial statements be supported with documentation showing the original purchase price or cost. Cause: The City of Poplar Housing Authority did not maintain adequate records to support the purchase price of the apartment buildings or the land on which the apartment buildings were built. Recommendation: We recommend that the Projects continue to look for the documentation which shows the original purchase price or cost of the Projects.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-003 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: Edgewater Estates did not maintain the replacement reserve funds in interest-bearing accounts in 2022. Condition and Context: The Project did not establish interest-bearing accounts for the replacement reserve funds as required by RD. Effect: RD projects are required to maintain interest bearing accounts for replacement reserve funds. Cause: The Project is not in compliance with RD regulations and procedures. Recommendation: The Project should establish an interest-bearing account for the replacement reserve funds.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: RD projects are required to setup and maintain reserves for insurance payments. Condition and Context: Edgewater Estates did not establish and fund an account for insurance reserves. Effect: The Project is not in compliance with RD regulations and procedures. Cause: The Project has not opened an account for insurance reserves. Recommendation: We recommend that the Project establish an insurance reserve account with the bank as soon as possible.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-005 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions, Reporting, Equipment and real property management Questioned Costs: None Criteria: The Projects are in a workout plan with RD to resolve non-compliance issues. The Projects are required to prepare proper certifications for all tenants as well as close open maintenance items in a timely manner. Condition and Context: The Projects are in a non-compliance workout plan with RD due to various non-compliance findings. Effect: The Project is operating in non-compliance with RD rules and regulations. Cause: The prior management did not comply with RD rules and regulations relating to improper maintenance of the buildings, certification of tenants, and the insurance reserve not being established. Recommendation: We recommend that the project continue to work with RD to resolve the non-compliance issues.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-001 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: Edgewater Estates and Combs Memorial did not establish or adequately fund the security deposit accounts in 2022. Condition and Context: Those Projects did not maintain the full amount of security deposit funds potentially owed to the tenants. Effect: The Projects are not in compliance with RD regulations and procedures. Cause: The Projects did not maintain the full amount of security deposit funds potentially owed to the tenants. Recommendation: The Projects should fully fund the security deposit accounts for the amounts potentially owed to tenants.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-002 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Equipment and Real Property Management Questioned Costs: None Criteria: Assets recorded on the financial statements should be supported by documentation showing the original cost or purchase price. Condition and Context: The Projects did not maintain adequate documentation to support the fixed assets recorded on the financial statements. Effect: The Projects are not in compliance with RD regulations or standards which require that assets recorded on the financial statements be supported with documentation showing the original purchase price or cost. Cause: The City of Poplar Housing Authority did not maintain adequate records to support the purchase price of the apartment buildings or the land on which the apartment buildings were built. Recommendation: We recommend that the Projects continue to look for the documentation which shows the original purchase price or cost of the Projects.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-003 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: Edgewater Estates did not maintain the replacement reserve funds in interest-bearing accounts in 2022. Condition and Context: The Project did not establish interest-bearing accounts for the replacement reserve funds as required by RD. Effect: RD projects are required to maintain interest bearing accounts for replacement reserve funds. Cause: The Project is not in compliance with RD regulations and procedures. Recommendation: The Project should establish an interest-bearing account for the replacement reserve funds.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions Questioned Costs: None Criteria: RD projects are required to setup and maintain reserves for insurance payments. Condition and Context: Edgewater Estates did not establish and fund an account for insurance reserves. Effect: The Project is not in compliance with RD regulations and procedures. Cause: The Project has not opened an account for insurance reserves. Recommendation: We recommend that the Project establish an insurance reserve account with the bank as soon as possible.
FEDERAL AWARDS FINDING Year Ended December 31, 2022 Finding 2022-005 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2022 Federal agency: United States Department of Agriculture Compliance Requirement: Special tests and provisions, Reporting, Equipment and real property management Questioned Costs: None Criteria: The Projects are in a workout plan with RD to resolve non-compliance issues. The Projects are required to prepare proper certifications for all tenants as well as close open maintenance items in a timely manner. Condition and Context: The Projects are in a non-compliance workout plan with RD due to various non-compliance findings. Effect: The Project is operating in non-compliance with RD rules and regulations. Cause: The prior management did not comply with RD rules and regulations relating to improper maintenance of the buildings, certification of tenants, and the insurance reserve not being established. Recommendation: We recommend that the project continue to work with RD to resolve the non-compliance issues.