FAC Explorer

Audit 28958

FY End
2022-12-31
Total Expended
$10.09M
Findings
2
Programs
2
Organization: Genesis Nonprofit Housing Corporation (MI)
Year: 2022 Accepted: 2023-08-15
Auditor: Doeren Mayhew & CO PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
29063 2022-001 Significant Deficiency Yes E
605505 2022-001 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $1.38M Yes 0
14.267 Continuum of Care Program $1.06M Yes 1

Contacts

Name Title Type
NCR4Z9NBCF99 John Wynbeek Auditee
6169882897 Danielle Pennings Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances 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, Cost Principles for Nonprofit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Genesis Nonprofit Housing Corporation and Related Entities has elected not to use the 10% de minimis indirect costs rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 7170612. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 475875. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 1381150. CONTINUUM OF CARE PROGRAM (14.267) - Balances outstanding at the end of the audit period were 1060000.
Title: BASIS OF PRESENTATION 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, Cost Principles for Nonprofit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Genesis Nonprofit Housing Corporation and Related Entities has elected not to use the 10% de minimis indirect costs rate allowed under the 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 Genesis Nonprofit Housing Corporation and Related Entities (the Corporation) 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 the Corporation, it is not intended to and does not present the combined financial position, related combined statements of activities and changes in net assets, functional expenses or cash flows of the Corporation.
Title: RELATED ENTITIES 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, Cost Principles for Nonprofit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Genesis Nonprofit Housing Corporation and Related Entities has elected not to use the 10% de minimis indirect costs rate allowed under the 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 reports activity for Genesis Nonprofit Housing Corporation and Related Entities. Genesis Nonprofit Housing Corporation includes general programs providing certain programmatic, management and administrative services.Genesis Nonprofit Housing Corporation is related to the following entities either through ownership or common control: Genesis Nonprofit Housing Corporation I, Genesis Limited Dividend Housing Association Limited Partnership (Genesis Oroiquis), Genesis Limited Dividend Housing Association Limited Partnership I (Genesis East), Heron Courtyard Limited Dividend Housing Association Limited Partnership, Heron Manor Limited Dividend Housing Association Limited Partnership, Kingsbury Place Limited Dividend Housing Association Limited Partnership, Genesis West Limited Dividend Housing Association Limited Partnership, and St. James Limited Dividend Housing Association Limited Partnership.
Title: PROGRAM AUDITS OF RELATED ENTITIES 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, Cost Principles for Nonprofit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Genesis Nonprofit Housing Corporation and Related Entities has elected not to use the 10% de minimis indirect costs rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. In accordance with Michigan State Housing Development Authority requirements, the following entities have been subject to program-specific compliance audits: Genesis Limited Dividend Housing Association Limited Partnership I (Genesis East), Heron Courtyard Limited Dividend Housing Association Limited Partnership, Heron Manor Limited Dividend Housing Association Limited Partnership, Kingsbury Place Limited Dividend Housing Association Limited Partnership, and Genesis West Limited Dividend Housing Association Limited Partnership.
Title: NONMONETARY AWARDS 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, Cost Principles for Nonprofit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Genesis Nonprofit Housing Corporation and Related Entities has elected not to use the 10% de minimis indirect costs rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. In accordance with Uniform Guidance, loans, loan guarantees, and capital grants are presented on the accompanying Schedule of Federal Awards at balances outstanding as of January 1, 2022. Following is the balance of the loan, loan guarantees, and capital grants as of December 31, 2022: The Corporation was the recipient of federal grants under the Continuum of Care Program funded by the Department of Housing and Urban Development (Federal Assistance Listing #14.267). Such awards received under this major program are as follows: For the benefit of Heron Courtyard Limited Dividend Housing Association Limited Partnership Direct Funding $400,000. This award is subject to continuing compliance requirements for 20 years after project completion (December 31, 2003).For the benefit of Kingsbury Place Limited Dividend Housing Association Limited Partnership Direct Funding $660,000. This award is subject to continuing compliance requirements for 20 years after initial occupancy of the project (August 29, 2006). The Corporation was the recipient of federal loan proceeds under the HOME Investment Partnerships Program funded by the Department of Housing and Urban Development (Federal Assistance Listing #14.239). Such awards received under this major program are as follows: For the benefit of Genesis Limited Dividend Housing Association Limited Partnership I Passed Through Michigan State Housing Development Authority $1,403,612. This award is subject to continuing compliance requirements for 20 years after project completion (August 12, 2002). For the benefit of Heron Courtyard Limited Dividend Housing Association Limited Partnership Passed Through Michigan State Housing Development Authority $1,320,000. Passed Through City of Grand Rapids $581,150. These awards are subject to continuing compliance requirements for 20 years after project completion (May 20, 2004). For the benefit of Kingsbury Place Limited Dividend Housing Association Limited Partnership Passed Through Michigan State Housing Development Authority $1,800,000. This award is subject to continuing compliance requirements for 20 years after the first year of the credit period (2006). For the benefit of Heron Manor Limited Dividend Housing Association Limited Partnership Passed Through Michigan State Housing Development Authority $1,697,000. This award is subject to continuing compliance requirements for 50 years after project financing (December 4, 2007). For the benefit of Heron Manor Limited Dividend Housing Association Limited Partnership Passed Through the City of Grand Rapids $800,000. This award is subject to continuing compliance requirements for 20 years after project completion (March 30, 2009). For the benefit of Genesis West Limited Dividend Housing Association Limited Partnership Passed Through Michigan State Housing Development Authority $950,000. This award is subject to continuing compliance requirements for 50 years after project completion (May 29, 2014). For the benefit of Genesis West Limited Dividend Housing Association Limited Partnership Passed Through Kent County Community Development $475,875. This award is subject to continuing compliance requirements for 20 years after project completion (May 29, 2014).

Finding Details

Finding 2022-001
#2022-001 ? Major Federal Award Finding ? Eligibility and Significant Deficiency in Internal Controls over Compliance This is a repeat of prior year finding #2021-001. Criteria: To be eligible to receive assistance under this program, an individual must meet the definition of ?homeless,? under 24 CFR section 578.3. Condition: The Corporation has two housing projects that received Continuum of Care funding for initial construction or rehabilitation. The respective grant agreements contain ongoing compliance requirements for a 20 year period. The grant agreement, by reference, incorporates the original grant application. During the year ended December 31, 2022, the sample of units selected for testing did contain evidence in the tenant file of prior homelessness. However the Corporation was unable to provide evidence that each Project was serving the required number of units occupied by individuals meeting the definition of ?homeless?. The grant agreements for the Projects with Continuum of Care funding do not provide an indication of the number of units required to house ?homeless? individuals. Effect: The effect of the above condition could result in disciplinary action as determined by HUD, including possible repayment of a portion of the continuing compliance grants. Cause: The Continuum of Care grant agreements do not provide guidance on the number of units required to be ?homeless? at each project under the definition provided by 24 CFR section 578.3. Each Project is within the last 5 years of the compliance period, and the Corporation is unable to locate the original grant application which may indicate the number of units required to serve ?homeless?. The grant agreements specifically incorporate the application by reference. In addition the Corporation made several contacts to HUD. The personnel at HUD were not able to specifically answer the inquiries regarding the number of units required to serve ?homeless? under the initial construction or rehabilitation grant agreements. Recommendation: Management should continue to work with HUD personnel to determine the continuing compliance requirements of the Continuum of Care funding received for initial construction or rehabilitation. Upon resolution of the requirements, management should ensure that each project with continuing compliance requirements under the Continuum of Care program has the required amount of units filled by ?homeless? individuals as defined by 24 CFR section 578.3. A system to monitor the required amount of units should be established by management and implemented to ensure compliance with the requirements. Questioned Costs: Unable to determine questioned costs, if any, due to the inability to determine the required amount of units that must serve the ?homeless? for the year ended December 31, 2022. Views of Responsible Officials: The Corporation agrees with the recommendations put forth by the auditors. The Corporation has contacted the local Continuum of Care and regional U.S. Department of Housing and Urban Development (HUD) office in an effort to address the finding and will continue to work with HUD personnel to determine the continuing compliance requirements of the Continuum of Care funding received for projects. See also attached Corrective Action Plan.
Finding 2022-001
#2022-001 ? Major Federal Award Finding ? Eligibility and Significant Deficiency in Internal Controls over Compliance This is a repeat of prior year finding #2021-001. Criteria: To be eligible to receive assistance under this program, an individual must meet the definition of ?homeless,? under 24 CFR section 578.3. Condition: The Corporation has two housing projects that received Continuum of Care funding for initial construction or rehabilitation. The respective grant agreements contain ongoing compliance requirements for a 20 year period. The grant agreement, by reference, incorporates the original grant application. During the year ended December 31, 2022, the sample of units selected for testing did contain evidence in the tenant file of prior homelessness. However the Corporation was unable to provide evidence that each Project was serving the required number of units occupied by individuals meeting the definition of ?homeless?. The grant agreements for the Projects with Continuum of Care funding do not provide an indication of the number of units required to house ?homeless? individuals. Effect: The effect of the above condition could result in disciplinary action as determined by HUD, including possible repayment of a portion of the continuing compliance grants. Cause: The Continuum of Care grant agreements do not provide guidance on the number of units required to be ?homeless? at each project under the definition provided by 24 CFR section 578.3. Each Project is within the last 5 years of the compliance period, and the Corporation is unable to locate the original grant application which may indicate the number of units required to serve ?homeless?. The grant agreements specifically incorporate the application by reference. In addition the Corporation made several contacts to HUD. The personnel at HUD were not able to specifically answer the inquiries regarding the number of units required to serve ?homeless? under the initial construction or rehabilitation grant agreements. Recommendation: Management should continue to work with HUD personnel to determine the continuing compliance requirements of the Continuum of Care funding received for initial construction or rehabilitation. Upon resolution of the requirements, management should ensure that each project with continuing compliance requirements under the Continuum of Care program has the required amount of units filled by ?homeless? individuals as defined by 24 CFR section 578.3. A system to monitor the required amount of units should be established by management and implemented to ensure compliance with the requirements. Questioned Costs: Unable to determine questioned costs, if any, due to the inability to determine the required amount of units that must serve the ?homeless? for the year ended December 31, 2022. Views of Responsible Officials: The Corporation agrees with the recommendations put forth by the auditors. The Corporation has contacted the local Continuum of Care and regional U.S. Department of Housing and Urban Development (HUD) office in an effort to address the finding and will continue to work with HUD personnel to determine the continuing compliance requirements of the Continuum of Care funding received for projects. See also attached Corrective Action Plan.