FAC Explorer

Audit 27323

FY End
2022-12-31
Total Expended
$8.14M
Findings
2
Programs
2
Organization: Housing Opportunities, Inc. (NC)
Year: 2022 Accepted: 2023-09-30
Auditor: Bernard Robinson & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
36353 2022-001 - Yes P
612795 2022-001 - Yes P

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $7.10M Yes 1
10.427 Rural Rental Assistance Payments $1.04M - 0

Contacts

Name Title Type
MGN9SAU7SQY8 Sandy Lucas Auditee
3365442300 Elizabeth Danner 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. Housing Opportunities, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance. 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 6543886.
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. Housing Opportunities, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance. 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 Housing Opportunities, 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). Because the Schedule presents only a selected portion of the operations of Housing Opportunities, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Housing Opportunities, Inc.

Finding Details

Finding 2022-001
Statement of Condition: Each wholly owned project of the Organization has its own individual bank account at each financial institution. Because these projects are owned by the Organization, all the projects' bank accounts at this financial institution must be combined when assessing FDIC coverage over these accounts as of year end. At December 31, 2022, the Organization's projects' funds combined with the Organization?s corporate funds held at a financial institution exceeded FDIC insurance coverage limits, putting the wholly owned projects' accounts at risk of loss at this financial institution. Criteria: USDA Handbook 2-3560, Chapter 4 states that bank account funds maintained in an institution may not exceed the limits established for Federal Deposit insurance. If funds exceed the amount covered by Federal Deposit insurance, the Organization must obtain a collateral pledge from the institution to cover all the funds or move funds to an institution that will insure the funds. Cause of Condition: Management did not transfer funds to separate financial institutions in a timely manner to provide for continuous FDIC insurance coverage. Effect of Condition: Noncompliance with USDA RD requirements and risk of loss of the wholly owned projects' funds. Recommendation: The Organization should continuously monitor cash balances to ensure that funds are always covered by FDIC insurance limits, collateral agreements are obtained, or funds are invested in government securities. Questioned Costs: $0. Information based on Universe and Population Size: The finding noted above was not a result of sampling. Sample Size Information: The finding noted above was not a result of sampling. Noncompliance Information: The finding noted above was not a result of sampling. Reporting Views of Responsible Officials: Management agrees with the above finding and is in the process of transferring funds to provide adequate FDIC coverage for all funds. Management will re-evaluate its policies and procedures to determine any necessary changes.
Finding 2022-001
Statement of Condition: Each wholly owned project of the Organization has its own individual bank account at each financial institution. Because these projects are owned by the Organization, all the projects' bank accounts at this financial institution must be combined when assessing FDIC coverage over these accounts as of year end. At December 31, 2022, the Organization's projects' funds combined with the Organization?s corporate funds held at a financial institution exceeded FDIC insurance coverage limits, putting the wholly owned projects' accounts at risk of loss at this financial institution. Criteria: USDA Handbook 2-3560, Chapter 4 states that bank account funds maintained in an institution may not exceed the limits established for Federal Deposit insurance. If funds exceed the amount covered by Federal Deposit insurance, the Organization must obtain a collateral pledge from the institution to cover all the funds or move funds to an institution that will insure the funds. Cause of Condition: Management did not transfer funds to separate financial institutions in a timely manner to provide for continuous FDIC insurance coverage. Effect of Condition: Noncompliance with USDA RD requirements and risk of loss of the wholly owned projects' funds. Recommendation: The Organization should continuously monitor cash balances to ensure that funds are always covered by FDIC insurance limits, collateral agreements are obtained, or funds are invested in government securities. Questioned Costs: $0. Information based on Universe and Population Size: The finding noted above was not a result of sampling. Sample Size Information: The finding noted above was not a result of sampling. Noncompliance Information: The finding noted above was not a result of sampling. Reporting Views of Responsible Officials: Management agrees with the above finding and is in the process of transferring funds to provide adequate FDIC coverage for all funds. Management will re-evaluate its policies and procedures to determine any necessary changes.