FAC Explorer

Audit 293658

FY End
2023-06-30
Total Expended
$5.69M
Findings
4
Programs
1
Organization: Lutheran Housing Corporation at Middletown, Inc. (MA)
Year: 2023 Accepted: 2024-03-05
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
372578 2023-001 Material Weakness - B
372579 2023-001 Material Weakness - B
949020 2023-001 Material Weakness - B
949021 2023-001 Material Weakness - B

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $302,326 Yes 1

Contacts

Name Title Type
SCJLZU9K2VG8 Kristine Hanscom Auditee
7742433900 Sean Morrison Auditor
No contacts on file

Notes to SEFA

Title: CAPITAL ADVANCE Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Lutheran Housing Corporation at Middletown, Inc. under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of 2 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 Lutheran Housing Corporation at Middletown, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Lutheran Housing Corporation at Middletown, Inc. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 as allowed under the Uniform Guidance. The amount of the capital advance outstanding as of June 30, 2023 amounted to $5,387,000.

Finding Details

Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Supportive Housing for the Elderly CFDA Number: 14.157 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control over Compliance Criteria: The HUD Management Agent Handbook requires that allowable management fees be calculated based, in part, on rents received during the award period. Condition: The Organization included rents earned, though not yet received from HUD, in its calculation of its allowable management fee, resulting in management fee expense in excess of the allowable amount. This was detected and corrected as part of the audit. Questioned Costs: $0 Cause: The year-end rents due from HUD were not backed out of the calculation of allowable management fee expense, as required by the HUD Management Agent Handbook. Effect or possible effect: Resulted in management fee expense in excess of amount allowable per the HUD Management Agent Handbook. This was detected and corrected as part of the audit. Recommendation: We recommend that the Organization review the HUD Management Agent Handbook and revise its internal control policies with regards to calculating its allowable management fee per the Handbook. Views of responsible officials: See management’s corrective action plan.
Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Supportive Housing for the Elderly CFDA Number: 14.157 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control over Compliance Criteria: The HUD Management Agent Handbook requires that allowable management fees be calculated based, in part, on rents received during the award period. Condition: The Organization included rents earned, though not yet received from HUD, in its calculation of its allowable management fee, resulting in management fee expense in excess of the allowable amount. This was detected and corrected as part of the audit. Questioned Costs: $0 Cause: The year-end rents due from HUD were not backed out of the calculation of allowable management fee expense, as required by the HUD Management Agent Handbook. Effect or possible effect: Resulted in management fee expense in excess of amount allowable per the HUD Management Agent Handbook. This was detected and corrected as part of the audit. Recommendation: We recommend that the Organization review the HUD Management Agent Handbook and revise its internal control policies with regards to calculating its allowable management fee per the Handbook. Views of responsible officials: See management’s corrective action plan.
Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Supportive Housing for the Elderly CFDA Number: 14.157 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control over Compliance Criteria: The HUD Management Agent Handbook requires that allowable management fees be calculated based, in part, on rents received during the award period. Condition: The Organization included rents earned, though not yet received from HUD, in its calculation of its allowable management fee, resulting in management fee expense in excess of the allowable amount. This was detected and corrected as part of the audit. Questioned Costs: $0 Cause: The year-end rents due from HUD were not backed out of the calculation of allowable management fee expense, as required by the HUD Management Agent Handbook. Effect or possible effect: Resulted in management fee expense in excess of amount allowable per the HUD Management Agent Handbook. This was detected and corrected as part of the audit. Recommendation: We recommend that the Organization review the HUD Management Agent Handbook and revise its internal control policies with regards to calculating its allowable management fee per the Handbook. Views of responsible officials: See management’s corrective action plan.
Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Supportive Housing for the Elderly CFDA Number: 14.157 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control over Compliance Criteria: The HUD Management Agent Handbook requires that allowable management fees be calculated based, in part, on rents received during the award period. Condition: The Organization included rents earned, though not yet received from HUD, in its calculation of its allowable management fee, resulting in management fee expense in excess of the allowable amount. This was detected and corrected as part of the audit. Questioned Costs: $0 Cause: The year-end rents due from HUD were not backed out of the calculation of allowable management fee expense, as required by the HUD Management Agent Handbook. Effect or possible effect: Resulted in management fee expense in excess of amount allowable per the HUD Management Agent Handbook. This was detected and corrected as part of the audit. Recommendation: We recommend that the Organization review the HUD Management Agent Handbook and revise its internal control policies with regards to calculating its allowable management fee per the Handbook. Views of responsible officials: See management’s corrective action plan.