Audit 292473

FY End

2021-06-30

Total Expended

$5.45M

Findings

4

Programs

2

Organization: 353-365 Housing Development Fund Company, Inc. (NY)

Year: 2021 Accepted: 2024-02-27

Auditor: Mayer Hoffman McCann CPAS the Ny Practice of Mayer Hoffman McCann PC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
370794	2021-003	Significant Deficiency	-	N
370795	2021-003	Significant Deficiency	-	N
947236	2021-003	Significant Deficiency	-	N
947237	2021-003	Significant Deficiency	-	N

ALN	Program	Spent	Major	Findings
14.155	Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects	$3.55M	Yes	1
14.195	Section 8 Housing Assistance Payments Program	$1.90M	Yes	1

Contacts

Name	Title	Type
YRH8HGR4YNJ5	Nestor Olivier	Auditee
2125630310	Vivian Jin	Auditor
No contacts on file

Notes to SEFA

Title: Note 3 - Mortage Accounting Policies: Note 1 – Basis of Presentation The schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of 353-365 Housing Development Fund Company, Inc., HUD Project No. 012-11297, and is presented on the accrual basis of accounting, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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 operations of 353-365 Housing Development Fund Company, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of 353-365 Housing Development Fund Company, Inc. De Minimis Rate Used: N Rate Explanation: 353-365 Housing Development Fund Company, Inc., has elected not to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. 353-365 Housing Development Fund Company, Inc., has a loan guaranteed by HUD and the outstanding balance of the loan at June 30, 2021 is $3,474,902.

Finding Details

Finding 2021-003

Condition: The project deposited surplus cash in excess of allowable amounts and failed to deposit current year’s surplus cash into its residual receipts account within 90 days of year-end. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing surplus cash into a residual receipts account in an amount which is equal to allowable amount per surplus cash computation within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely calculation and deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in excess payment to the residual receipts account of $126,207. Recommendation: The Company should design their internal controls to ensure that calculation of surplus cash is reviewed and performed timely, to ensure they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on October 1, 2021.

Finding 2021-003

Condition: The project deposited surplus cash in excess of allowable amounts and failed to deposit current year’s surplus cash into its residual receipts account within 90 days of year-end. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing surplus cash into a residual receipts account in an amount which is equal to allowable amount per surplus cash computation within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely calculation and deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in excess payment to the residual receipts account of $126,207. Recommendation: The Company should design their internal controls to ensure that calculation of surplus cash is reviewed and performed timely, to ensure they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on October 1, 2021.

Finding 2021-003

Condition: The project deposited surplus cash in excess of allowable amounts and failed to deposit current year’s surplus cash into its residual receipts account within 90 days of year-end. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing surplus cash into a residual receipts account in an amount which is equal to allowable amount per surplus cash computation within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely calculation and deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in excess payment to the residual receipts account of $126,207. Recommendation: The Company should design their internal controls to ensure that calculation of surplus cash is reviewed and performed timely, to ensure they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on October 1, 2021.

Finding 2021-003

Condition: The project deposited surplus cash in excess of allowable amounts and failed to deposit current year’s surplus cash into its residual receipts account within 90 days of year-end. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing surplus cash into a residual receipts account in an amount which is equal to allowable amount per surplus cash computation within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely calculation and deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in excess payment to the residual receipts account of $126,207. Recommendation: The Company should design their internal controls to ensure that calculation of surplus cash is reviewed and performed timely, to ensure they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on October 1, 2021.