FAC Explorer

Audit 292933

FY End
2022-12-31
Total Expended
$8.35M
Findings
4
Programs
2
Organization: Fairport Baptist Homes (NY)
Year: 2022 Accepted: 2024-02-29
Auditor: Bonadio & CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
371226 2022-001 Material Weakness - A
371227 2022-002 - - A
947668 2022-001 Material Weakness - A
947669 2022-002 - - A

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $7.66M Yes 1
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $695,200 - 1

Contacts

Name Title Type
SWGSXLTTNAM7 Thomas Poelma Auditee
5853382300 Kelley Demonte Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting and are presented in accordance with accounting principles generally accepted in the United States of America. 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 Organizations have elected not to use the 10% de minimus indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Fairport Baptist Homes Caring Ministries and Affiliates (the Organizations) under programs of the federal government for the year ended December 31, 2022. The information in the 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 operations of the Organizations, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organizations.
Title: INSURED MORTGAGE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting and are presented in accordance with accounting principles generally accepted in the United States of America. 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 Organizations have elected not to use the 10% de minimus indirect cost rate as allowed under the Uniform Guidance. The Organizations obtained a mortgage guarantee from HUD. The outstanding balance of this mortgage at December 31, 2022 was $7,398,833.
Title: DISASTER GRANTS – PUBLIC ASSISTANCE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting and are presented in accordance with accounting principles generally accepted in the United States of America. 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 Organizations have elected not to use the 10% de minimus indirect cost rate as allowed under the Uniform Guidance. The amount included in the schedule of expenditures of federal awards is based upon the December 31, 2022 FEMA reporting.

Finding Details

Finding 2022-001
MATERIAL WEAKNESS 2022-001 Account Reconciliations Criteria: An effective system of internal controls over financial reporting requires consistent, timely reconciliations of major general ledger accounts. Condition/context: Several general ledger accounts were not fully reconciled at year end. Cause: Staffing shortages and turn over caused by the COVID-19 pandemic and pending bankruptcy continued to put strain on the finance department by requiring existing staff to perform multiple job responsibilities. This caused a lack of time to perform complete and accurate reconciliations on a timely basis. Effect: Several accounts were not completely reconciled, causing additional work to be necessary, and requiring material adjustments to the financial statements. Recommendation: We recommend management review its current reconciliation policies and procedures to identify any gaps in process or change in roles necessary so complete reconciliations to the general ledger are performed on a regular basis. This will improve current internal reporting and more accurate year end reporting. Views of management and planned corrective action: Management agrees with the recommendation. We are working on bolstering our finance team to be able to adhere to already established reconciliation process that includes all reconciliations are done in the recommended time frames after the standard entries are done.
Finding 2022-002
Criteria Under the terms of the related regulatory agreement The Homes is required to make timely monthly debt payments and deposits in certain escrow accounts. Condition/Context As part of our compliance testing, we reviewed the debt and escrow schedules and noted that the debt payments and escrow payments due in February through December of 2022 were not made. Cause The Homes was experiencing significant cash constraints and was not able to make debt payments and escrow payments as they were due and was limited under the terms of the bankruptcy filing as to what payments were allowable. Effect The Homes is out of compliance with the HUD regulatory agreement. Recommendation As HUD servicer is a named secured creditor in the bankruptcy filing, we recommend that The Homes follow the rules of the bankruptcy filing. Management Response The HUD mortgage is a secured creditor under the bankruptcy filing and we expect the lender to be paid under the terms of the bankruptcy agreement at the conclusion of the sale of the Facility that is expected to occur during 2024.
Finding 2022-001
MATERIAL WEAKNESS 2022-001 Account Reconciliations Criteria: An effective system of internal controls over financial reporting requires consistent, timely reconciliations of major general ledger accounts. Condition/context: Several general ledger accounts were not fully reconciled at year end. Cause: Staffing shortages and turn over caused by the COVID-19 pandemic and pending bankruptcy continued to put strain on the finance department by requiring existing staff to perform multiple job responsibilities. This caused a lack of time to perform complete and accurate reconciliations on a timely basis. Effect: Several accounts were not completely reconciled, causing additional work to be necessary, and requiring material adjustments to the financial statements. Recommendation: We recommend management review its current reconciliation policies and procedures to identify any gaps in process or change in roles necessary so complete reconciliations to the general ledger are performed on a regular basis. This will improve current internal reporting and more accurate year end reporting. Views of management and planned corrective action: Management agrees with the recommendation. We are working on bolstering our finance team to be able to adhere to already established reconciliation process that includes all reconciliations are done in the recommended time frames after the standard entries are done.
Finding 2022-002
Criteria Under the terms of the related regulatory agreement The Homes is required to make timely monthly debt payments and deposits in certain escrow accounts. Condition/Context As part of our compliance testing, we reviewed the debt and escrow schedules and noted that the debt payments and escrow payments due in February through December of 2022 were not made. Cause The Homes was experiencing significant cash constraints and was not able to make debt payments and escrow payments as they were due and was limited under the terms of the bankruptcy filing as to what payments were allowable. Effect The Homes is out of compliance with the HUD regulatory agreement. Recommendation As HUD servicer is a named secured creditor in the bankruptcy filing, we recommend that The Homes follow the rules of the bankruptcy filing. Management Response The HUD mortgage is a secured creditor under the bankruptcy filing and we expect the lender to be paid under the terms of the bankruptcy agreement at the conclusion of the sale of the Facility that is expected to occur during 2024.