Audit 28191

FY End

2022-12-31

Total Expended

$2.15M

Findings

4

Programs

1

Organization: Thompson House Inc. (MA)

Year: 2022 Accepted: 2023-09-29

Auditor: John P Sannella CPA

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
31796	2022-001	Material Weakness	-	C
31797	2022-001	Material Weakness	-	C
608238	2022-001	Material Weakness	-	C
608239	2022-001	Material Weakness	-	C

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$130,090	Yes	1

Contacts

Name	Title	Type
K33MVXGENS95	Ronald Bridge	Auditee
9787740445	John P. Sannella	Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: NOTE 1BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Thompson House, 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 Thompson House, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Thompson House, Inc. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures 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. Thompson House, Inc. has not elected to use the 10-percent de minimus indirect cost rate as allowed under Uniform Guidance.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 Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES (14.181) - Balances outstanding at the end of the audit period were 2016000.

Finding Details

Finding 2022-001

2022-001 Federal agency: Department of Housing and Urban Development Federal program: Section 811 - Supportive Housing for Persons with Disabilities CFDA Number: 14.181 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Compliance ? Material Criteria or Specific Requirement: Loan from Replacement Reserve account should be repaid when rent subsidy payments are received and required deposits to the Replacement Reserve should be made on a monthly basis. Condition: Per a HUD Approval No. 2502-0555 dated April 14, 2022, Permission was granted to borrow funds to cover operating expenses from the Replacement Reserve account due to not receiving January, February and March PRAC funds. The total amount of the borrowed funds was to be deposited back to the Replacement Reserve upon receipt of the PRAC subsidy. In addition, monthly deposits of $5,000 per month should be made into the Replacement Reserve account. The deposits were only made for 7 months. Questioned Costs. $85,000 Context: Procedures were performed to test the activity in the Replacement Reserve account for 2022, which determined that the proper deposits were not made through 2022. Cause: Controls were not followed to ensure that the proper amounts were being deposited into the Replacement Reserve account. Effect: The Replacement Reserve account is under funded by $85,000. Repeat Finding: No. Recommendation: The Project should deposit the $85,000 into the Replacement Reserve account as soon as possible. Views of Responsible Officials and Corrective Action: Management intends to correct this underpayment within the next 30 days. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.

Finding 2022-001

2022-001 Federal agency: Department of Housing and Urban Development Federal program: Section 811 - Supportive Housing for Persons with Disabilities CFDA Number: 14.181 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Compliance ? Material Criteria or Specific Requirement: Loan from Replacement Reserve account should be repaid when rent subsidy payments are received and required deposits to the Replacement Reserve should be made on a monthly basis. Condition: Per a HUD Approval No. 2502-0555 dated April 14, 2022, Permission was granted to borrow funds to cover operating expenses from the Replacement Reserve account due to not receiving January, February and March PRAC funds. The total amount of the borrowed funds was to be deposited back to the Replacement Reserve upon receipt of the PRAC subsidy. In addition, monthly deposits of $5,000 per month should be made into the Replacement Reserve account. The deposits were only made for 7 months. Questioned Costs. $85,000 Context: Procedures were performed to test the activity in the Replacement Reserve account for 2022, which determined that the proper deposits were not made through 2022. Cause: Controls were not followed to ensure that the proper amounts were being deposited into the Replacement Reserve account. Effect: The Replacement Reserve account is under funded by $85,000. Repeat Finding: No. Recommendation: The Project should deposit the $85,000 into the Replacement Reserve account as soon as possible. Views of Responsible Officials and Corrective Action: Management intends to correct this underpayment within the next 30 days. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.

Finding 2022-001

2022-001 Federal agency: Department of Housing and Urban Development Federal program: Section 811 - Supportive Housing for Persons with Disabilities CFDA Number: 14.181 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Compliance ? Material Criteria or Specific Requirement: Loan from Replacement Reserve account should be repaid when rent subsidy payments are received and required deposits to the Replacement Reserve should be made on a monthly basis. Condition: Per a HUD Approval No. 2502-0555 dated April 14, 2022, Permission was granted to borrow funds to cover operating expenses from the Replacement Reserve account due to not receiving January, February and March PRAC funds. The total amount of the borrowed funds was to be deposited back to the Replacement Reserve upon receipt of the PRAC subsidy. In addition, monthly deposits of $5,000 per month should be made into the Replacement Reserve account. The deposits were only made for 7 months. Questioned Costs. $85,000 Context: Procedures were performed to test the activity in the Replacement Reserve account for 2022, which determined that the proper deposits were not made through 2022. Cause: Controls were not followed to ensure that the proper amounts were being deposited into the Replacement Reserve account. Effect: The Replacement Reserve account is under funded by $85,000. Repeat Finding: No. Recommendation: The Project should deposit the $85,000 into the Replacement Reserve account as soon as possible. Views of Responsible Officials and Corrective Action: Management intends to correct this underpayment within the next 30 days. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.

Finding 2022-001

2022-001 Federal agency: Department of Housing and Urban Development Federal program: Section 811 - Supportive Housing for Persons with Disabilities CFDA Number: 14.181 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Compliance ? Material Criteria or Specific Requirement: Loan from Replacement Reserve account should be repaid when rent subsidy payments are received and required deposits to the Replacement Reserve should be made on a monthly basis. Condition: Per a HUD Approval No. 2502-0555 dated April 14, 2022, Permission was granted to borrow funds to cover operating expenses from the Replacement Reserve account due to not receiving January, February and March PRAC funds. The total amount of the borrowed funds was to be deposited back to the Replacement Reserve upon receipt of the PRAC subsidy. In addition, monthly deposits of $5,000 per month should be made into the Replacement Reserve account. The deposits were only made for 7 months. Questioned Costs. $85,000 Context: Procedures were performed to test the activity in the Replacement Reserve account for 2022, which determined that the proper deposits were not made through 2022. Cause: Controls were not followed to ensure that the proper amounts were being deposited into the Replacement Reserve account. Effect: The Replacement Reserve account is under funded by $85,000. Repeat Finding: No. Recommendation: The Project should deposit the $85,000 into the Replacement Reserve account as soon as possible. Views of Responsible Officials and Corrective Action: Management intends to correct this underpayment within the next 30 days. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.