FAC Explorer

Audit 293102

FY End
2022-12-31
Total Expended
$5.92M
Findings
2
Programs
2
Organization: 358-74 Vernon Avenue Housing Development Fund Corporation (NY)
Year: 2022 Accepted: 2024-03-01
Auditor: Galleros Robinson Certified Public Accountants LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
371424 2022-002 - Yes N
947866 2022-002 - Yes N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $5.43M Yes 1
14.195 Section 8 Housing Assistance Payments Program $488,541 Yes 0

Contacts

Name Title Type
MN9LBQAVK3H5 Peggie J. Waddell Auditee
2126655500 Leonora Galleros Auditor
No contacts on file

Notes to SEFA

Title: Federal Loan Program Accounting Policies: The accompanying schedule of expenditures of federal awards has been prepared on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedules may differ from amounts presented in or used in the preparation of the basic financial statements. De Minimis Rate Used: Y Rate Explanation: The Project has elected to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal loan program listed on the schedule is administered directly by the Project and balances and transactions relating to the programs are included in the Project’s basic financial statements. Since there was no loan activity during 2022, the loan outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule.

Finding Details

Finding 2022-002
Criteria Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition We noted that the required annual deposits to the replacement reserve for 30 months for 2020, 2021 and 2022 amounting to $80,430 was not deposited to the replacement reserve. Cause The Project’s cash flow deficiencies resulted in noncompliance with the reserve requirement. Effect Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost None. Context Thirty (30) monthly deposits to the replacement reserve was not made for 2020, 2021 and 2022. Recommendation We recommend that the Project regularly monitors deposits in the reserve for replacement to ensure that it complies with the requirements of 24 CFR sections 891.405 and 891.605 or request waiver due to cash flow issues. View of Responsible Official and Planned Corrective Action We will work on monthly cash flows availability to ensure funding the replacement reserve shortfall.
Finding 2022-002
Criteria Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition We noted that the required annual deposits to the replacement reserve for 30 months for 2020, 2021 and 2022 amounting to $80,430 was not deposited to the replacement reserve. Cause The Project’s cash flow deficiencies resulted in noncompliance with the reserve requirement. Effect Required replacement reserve was not complied with during fiscal year 2022. Questioned Cost None. Context Thirty (30) monthly deposits to the replacement reserve was not made for 2020, 2021 and 2022. Recommendation We recommend that the Project regularly monitors deposits in the reserve for replacement to ensure that it complies with the requirements of 24 CFR sections 891.405 and 891.605 or request waiver due to cash flow issues. View of Responsible Official and Planned Corrective Action We will work on monthly cash flows availability to ensure funding the replacement reserve shortfall.