FAC Explorer

Audit 290783

FY End
2023-05-31
Total Expended
$1.77M
Findings
6
Programs
6
Organization: Rapid City Club for Boys, Inc. (SD)
Year: 2023 Accepted: 2024-02-16
Auditor: Ketel Thorstenson LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
369512 2023-001 Material Weakness Yes L
369513 2023-003 Material Weakness - ABHLM
369514 2023-004 Significant Deficiency Yes L
945954 2023-001 Material Weakness Yes L
945955 2023-003 Material Weakness - ABHLM
945956 2023-004 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $1.25M Yes 3
14.275 Housing Trust Fund $300,000 - 0
10.558 Child and Adult Care Food Program $97,817 - 0
10.559 Summer Food Service Program for Children $56,793 - 0
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $49,388 - 0
21.019 Coronavirus Relief Fund $7,500 - 0

Contacts

Name Title Type
KD8PSHPJ57B6 Doug Herrmann Auditee
6053433500 Jean Schroeder Auditor
No contacts on file

Notes to SEFA

Title: Note 1 – Basis of Presentation and Summary of Significant Accounting Policies Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended May 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. 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 Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended May 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. 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.
Title: Note 2 – Indirect Cost Rate Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended May 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. 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 Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 3 – Cash Reimbursement Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended May 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. 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 Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. These amounts reflect cash received. Federal reimbursements are based on approved rates for services provided rather than reimbursement for specific expenditures.
Title: Note 4 – Loan Programs Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended May 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. 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 Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization was approved by the SDHDA to receive two loans totaling $1 million and $1.1 million under the Home Investment Partnership Program, and one loan under the Housing Trust Fund totaling $400,000, to construct low income housing. The Organization spent $1,555,000 of the total $2,540,000 available during the year ending May 31, 2023. The balances owed at May 31, 2023 under these three loans total $2,055,000.

Finding Details

Finding 2023-001
2023-001 FINDING: Financial Statement Preparation and Schedule of Expenditures of Federal Awards Criteria and Effect: It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the Organization’s management. In addition, management was unaware that Uniform Guidance requirements were necessary. Repeat Finding From Prior Year: Yes, prior year finding 2022-001 Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared financials and SEFA in detail for their accuracy, we have answered any questions they might have, and we have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification and disclosure in your statements. We are satisfied the appropriate steps have been taken to provide the Organization with the completed financial statements and SEFA. It is the responsibility of management and the Board of Directors to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.
Finding 2023-003
Federal Program Affected: U.S. Department of Housing and Urban Development Home Investment Partnerships Program ALN 14.239 Compliance Requirement: All applicable requirements Questioned Costs: N/A Condition and Cause: During the course of our engagement, we found monitoring of the financial statements and internal controls has not been fully implemented in regard to Heartland Heights LP, Heartland Heights LLC, Heartland Heights LP2, and Heartland Heights LLC 2. We also noted approval documentation was not maintained for several internal control processes. Criteria and Effect: It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the Organization’s management. Repeat Finding From Prior Year: No Recommendation: Management should receive and review regular financial statement activity and determine reasonableness based on knowledge of activities and expectations developed. This should include monitoring compliance with tax credits. In addition, with apartment operations starting in late FY22, internal controls should be assessed to determine proper segregation of duties is occurring and that accounts are properly reconciled (e.g. tenant receivables and security deposits). Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.
Finding 2023-004
2023-004 FINDING: Uniform Guidance Written Policies Federal Program Affected: U.S. Department of Housing and Urban Development Home Investment Partnerships Program ALN 14.239 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: None of the required Uniform Guidance written polices are adopted by the Organization. Criteria and Effect: Uniform Guidance requires certain organizational polices such as allowable costs, procurement, conflicts of interest and other policies to be adopted by the Organization to reduce the likelihood funds will be misused. Repeat Finding From Prior Year: Yes, prior year finding 2022-005 Recommendations: The Organization should reviewed and adopted required Uniform Guidance policies. Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.
Finding 2023-001
2023-001 FINDING: Financial Statement Preparation and Schedule of Expenditures of Federal Awards Criteria and Effect: It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the Organization’s management. In addition, management was unaware that Uniform Guidance requirements were necessary. Repeat Finding From Prior Year: Yes, prior year finding 2022-001 Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared financials and SEFA in detail for their accuracy, we have answered any questions they might have, and we have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification and disclosure in your statements. We are satisfied the appropriate steps have been taken to provide the Organization with the completed financial statements and SEFA. It is the responsibility of management and the Board of Directors to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.
Finding 2023-003
Federal Program Affected: U.S. Department of Housing and Urban Development Home Investment Partnerships Program ALN 14.239 Compliance Requirement: All applicable requirements Questioned Costs: N/A Condition and Cause: During the course of our engagement, we found monitoring of the financial statements and internal controls has not been fully implemented in regard to Heartland Heights LP, Heartland Heights LLC, Heartland Heights LP2, and Heartland Heights LLC 2. We also noted approval documentation was not maintained for several internal control processes. Criteria and Effect: It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the Organization’s management. Repeat Finding From Prior Year: No Recommendation: Management should receive and review regular financial statement activity and determine reasonableness based on knowledge of activities and expectations developed. This should include monitoring compliance with tax credits. In addition, with apartment operations starting in late FY22, internal controls should be assessed to determine proper segregation of duties is occurring and that accounts are properly reconciled (e.g. tenant receivables and security deposits). Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.
Finding 2023-004
2023-004 FINDING: Uniform Guidance Written Policies Federal Program Affected: U.S. Department of Housing and Urban Development Home Investment Partnerships Program ALN 14.239 Compliance Requirement: Reporting Questioned Costs: N/A Condition and Cause: None of the required Uniform Guidance written polices are adopted by the Organization. Criteria and Effect: Uniform Guidance requires certain organizational polices such as allowable costs, procurement, conflicts of interest and other policies to be adopted by the Organization to reduce the likelihood funds will be misused. Repeat Finding From Prior Year: Yes, prior year finding 2022-005 Recommendations: The Organization should reviewed and adopted required Uniform Guidance policies. Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.