FAC Explorer

Audit 291428

FY End
2023-09-30
Total Expended
$6.31M
Findings
4
Programs
1
Organization: The Pavilion Housing Development Fund Corporation (NY)
Year: 2023 Accepted: 2024-02-21
Auditor: Withumsmith+brown PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
369962 2023-001 - Yes N
369963 2023-002 - - P
946404 2023-001 - Yes N
946405 2023-002 - - P

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $471,000 Yes 2

Contacts

Name Title Type
KTV2HWLCJE16 Heng Ly Auditee
7183673200 James Huang Auditor
No contacts on file

Notes to SEFA

Title: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CAPITAL ADVANCE (SECTION 202) Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards (“the Schedule”) presents the activities in all federal awards of The Pavilion Housing Development Fund Corporation. All financial assistance received directly from federal agencies as well as financial assistance passed through other governmental agencies or non-profit organizations are included on the schedule. 2. BASIS OF ACCOUNTING The Schedule is presented using the accrual basis of accounting. The amounts reported in the Schedule may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either cash or a modified cash basis of accounting. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Federal expenditures are reported on the statement of activities as operating costs before depreciation. The expenditures reported in the basic financial statements may differ from the expenditures reported in the Schedule due to program expenditures exceeding grant or contract budget limitations or agency matching or in-kind contributions which are not included as federal awards. 4. BASIS OF PRESENTATION The accompanying Schedule includes the federal award activity of The Pavilion Housing Development Fund Corporation under programs of the federal government for the year ended September 30, 2023. 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 Pavilion Housing Development Fund Corporation, it is not intended and does not present the financial position, changes in net assets (deficit), or cash flows of The Pavilion Housing Development Fund Corporation. 5. SUBRECIPIENTS The non-profit Organization provided no federal awards to sub recipients for the year ended September 30, 2023. 6. INDIRECT COSTS The non-profit Organization does not have a federally negotiated indirect cost rate and has not elected to use the 10% de minimis rate as covered in section 200.414 in the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The non-profit Organization has received financing for the Project consisting of a capital advance in the amount of $5,840,900 from the United States Department of Housing and Urban Development (“HUD”). The advance is subject to HUD compliance requirements and will be forgiven in 2045 if all requirements are met. The balance of the capital advance at September 30, 2023 is $5,840,900.

Finding Details

Finding 2023-001
Criteria The non-profit Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the non-profit Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2023, a total of $54,061 was to be deposited into the replacement reserve account, which consists of $49,904 for 2023 deposits and 2022 deposits, plus $4,157 for 2021 delinquent deposits; however, no deposits were made into the replacement reserve account. Condition The non-profit Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the non-profit Organization did not make all required deposits in the current year. Effect The non-profit Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2022-001 and 2021-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Finding 2023-002
Criteria Audits of financial statements of HUD projects are required to deposit security deposit funds received from tenants in a separate bank account, apart from all other funds of the Project. Condition The security deposits received for 2 tenants were not deposited or transferred to the security deposit bank account. Cause The security deposits were deposited into the operating account and the funds were not transferred to the security deposit account. Questioned Costs None noted. Effect The non-profit Organization is noncompliant with the requirements of HUD. Recommendation The non-profit Organization should transfer the funds from the operating account to the security deposit account. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.
Finding 2023-001
Criteria The non-profit Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the non-profit Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2023, a total of $54,061 was to be deposited into the replacement reserve account, which consists of $49,904 for 2023 deposits and 2022 deposits, plus $4,157 for 2021 delinquent deposits; however, no deposits were made into the replacement reserve account. Condition The non-profit Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the non-profit Organization did not make all required deposits in the current year. Effect The non-profit Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2022-001 and 2021-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Finding 2023-002
Criteria Audits of financial statements of HUD projects are required to deposit security deposit funds received from tenants in a separate bank account, apart from all other funds of the Project. Condition The security deposits received for 2 tenants were not deposited or transferred to the security deposit bank account. Cause The security deposits were deposited into the operating account and the funds were not transferred to the security deposit account. Questioned Costs None noted. Effect The non-profit Organization is noncompliant with the requirements of HUD. Recommendation The non-profit Organization should transfer the funds from the operating account to the security deposit account. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.