Audit 28847

FY End

2022-06-30

Total Expended

$1.02M

Findings

2

Programs

2

Organization: Creative Housing Iv, Inc. (AR)

Year: 2022 Accepted: 2022-10-30

Auditor: Forvis LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
28773	2022-001	Material Weakness	-	N
605215	2022-001	Material Weakness	-	N

ALN	Program	Spent	Major	Findings
14.157	Supportive Housing for the Elderly	$937,300	Yes	1
14.195	Section 8 Housing Assistance Payments Program	$80,536	-	0

Contacts

Name	Title	Type
P2T1KRTDWP35	Barbara Staggs	Auditee
8708638194	Phang Soundara	Auditor
No contacts on file

Notes to SEFA

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, as applicable, either the cost principles in OMB A-122 or 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 Project has elected not to use the 10-percent de minimis indirect cost rate allowed under theUniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Creative Housing IV, Inc. (the Project) under programs of the federal government for the year ended June 30, 2022. 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: Federal Loan Programs 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, as applicable, either the cost principles in OMB A-122 or 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 Project has elected not to use the 10-percent de minimis indirect cost rate allowed under theUniform Guidance. The Project did not have a balance outstanding due to any federal loan programs included in the Projects basic financial statements at June 30, 2022. The Projects mortgage note with HUD through the Supportive Housing for Persons with Disabilities program was recorded as a contribution from HUD due to the terms described in the financial statements.

Finding Details

Finding 2022-001

Criteria or Specific Requirement ? Special Tests and Provisions: Residual Receipts Account (24 CFR 891.400(e) and 891.600(e)) Condition ? The required annual deposit to the residual receipts account was not made. This deposit is required to be made within 60 days following year-end. Questioned Costs ? None. Context ? The Project is required to calculate surplus cash at the end of each fiscal year and any amount greater than zero is required to be deposited to a federally insured residual receipts account within 60 days of year-end. The Project properly calculated surplus cash for fiscal year 2021; however, funds were not deposited into the residual receipts account. Effect ? The Project did not comply with the residual receipts compliance requirement. Cause ? Fiscal year 2021 was the second year the Project had surplus cash that was required to be deposited to the residual receipts account and management was dependent on HUD to communicate surplus cash. Identification as a Repeat Finding ? No. Recommendation ? Management should create policies and procedures to identify and transfer surplus cash to the residual receipts account to ensure compliance with this requirement. View of Responsible Officials and Planned Corrective Actions ? Surplus cash is calculated on a monthly basis. All residual receipts are required to be deposited in a separate federally insured account within 60 days of the fiscal year-end. Written instructions are included on the surplus cash calculation spreadsheet to ensure compliance.

Finding 2022-001

Criteria or Specific Requirement ? Special Tests and Provisions: Residual Receipts Account (24 CFR 891.400(e) and 891.600(e)) Condition ? The required annual deposit to the residual receipts account was not made. This deposit is required to be made within 60 days following year-end. Questioned Costs ? None. Context ? The Project is required to calculate surplus cash at the end of each fiscal year and any amount greater than zero is required to be deposited to a federally insured residual receipts account within 60 days of year-end. The Project properly calculated surplus cash for fiscal year 2021; however, funds were not deposited into the residual receipts account. Effect ? The Project did not comply with the residual receipts compliance requirement. Cause ? Fiscal year 2021 was the second year the Project had surplus cash that was required to be deposited to the residual receipts account and management was dependent on HUD to communicate surplus cash. Identification as a Repeat Finding ? No. Recommendation ? Management should create policies and procedures to identify and transfer surplus cash to the residual receipts account to ensure compliance with this requirement. View of Responsible Officials and Planned Corrective Actions ? Surplus cash is calculated on a monthly basis. All residual receipts are required to be deposited in a separate federally insured account within 60 days of the fiscal year-end. Written instructions are included on the surplus cash calculation spreadsheet to ensure compliance.