FAC Explorer

Audit 295334

FY End
2023-06-30
Total Expended
$1.17M
Findings
6
Programs
1
Organization: River Kourt Apartments (OR)
Year: 2023 Accepted: 2024-03-15
Auditor: Jones & Roth PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
380547 2023-001 Material Weakness Yes E
380548 2023-002 Significant Deficiency - L
380549 2023-003 Significant Deficiency Yes I
956989 2023-001 Material Weakness Yes E
956990 2023-002 Significant Deficiency - L
956991 2023-003 Significant Deficiency Yes I

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $1.17M Yes 3

Contacts

Name Title Type
JL12MKGHP7G7 Kathleen Broadhurst Auditee
5416861262 Kari Young Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of River Kourt Apartments 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 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 the operations of River Kourt Apartments, it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of River Kourt Apartments. 2. 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. River Kourt Apartments was awarded a capital advance in the amount of $1,096,400 from HUD in 1996 under Section 811 of the National Affordable Housing Act. The capital advance qualifies as a major program due to continuing compliance requirements associated with this unamortizable mortgage. Also included in this major program is the HUD Project Rental Assistance Contract (PRAC) awarded. These programs are both components of HUD Supportive Housing for Persons with Disabilities, which is the major program. Determination of the amount of federal awards expended for the Section 811 Capital Advance Program is based on the June 30, 2023 balance of the capital advance in accordance with the Uniform Guidance. The balance of the capital advance at June 30, 2023 was $1,096,400. De Minimis Rate Used: Y Rate Explanation: De Minimis Indirect Cost Rate Election River Kourt Apartments has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance; however, the award agreements with HUD do not include an indirect cost reimbursement, so there were no indirect costs charged to the federal award programs for the year ended June 30, 2023. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of River Kourt Apartments 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 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 the operations of River Kourt Apartments, it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of River Kourt Apartments.
Title: Summary of Significant Accounting Policies Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of River Kourt Apartments 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 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 the operations of River Kourt Apartments, it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of River Kourt Apartments. 2. 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. River Kourt Apartments was awarded a capital advance in the amount of $1,096,400 from HUD in 1996 under Section 811 of the National Affordable Housing Act. The capital advance qualifies as a major program due to continuing compliance requirements associated with this unamortizable mortgage. Also included in this major program is the HUD Project Rental Assistance Contract (PRAC) awarded. These programs are both components of HUD Supportive Housing for Persons with Disabilities, which is the major program. Determination of the amount of federal awards expended for the Section 811 Capital Advance Program is based on the June 30, 2023 balance of the capital advance in accordance with the Uniform Guidance. The balance of the capital advance at June 30, 2023 was $1,096,400. De Minimis Rate Used: Y Rate Explanation: De Minimis Indirect Cost Rate Election River Kourt Apartments has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance; however, the award agreements with HUD do not include an indirect cost reimbursement, so there were no indirect costs charged to the federal award programs for the year ended June 30, 2023. 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. River Kourt Apartments was awarded a capital advance in the amount of $1,096,400 from HUD in 1996 under Section 811 of the National Affordable Housing Act. The capital advance qualifies as a major program due to continuing compliance requirements associated with this unamortizable mortgage. Also included in this major program is the HUD Project Rental Assistance Contract (PRAC) awarded. These programs are both components of HUD Supportive Housing for Persons with Disabilities, which is the major program. Determination of the amount of federal awards expended for the Section 811 Capital Advance Program is based on the June 30, 2023 balance of the capital advance in accordance with the Uniform Guidance. The balance of the capital advance at June 30, 2023 was $1,096,400.
Title: De Minimis Indirect Cost Rate Election Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of River Kourt Apartments 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 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 the operations of River Kourt Apartments, it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of River Kourt Apartments. 2. 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. River Kourt Apartments was awarded a capital advance in the amount of $1,096,400 from HUD in 1996 under Section 811 of the National Affordable Housing Act. The capital advance qualifies as a major program due to continuing compliance requirements associated with this unamortizable mortgage. Also included in this major program is the HUD Project Rental Assistance Contract (PRAC) awarded. These programs are both components of HUD Supportive Housing for Persons with Disabilities, which is the major program. Determination of the amount of federal awards expended for the Section 811 Capital Advance Program is based on the June 30, 2023 balance of the capital advance in accordance with the Uniform Guidance. The balance of the capital advance at June 30, 2023 was $1,096,400. De Minimis Rate Used: Y Rate Explanation: De Minimis Indirect Cost Rate Election River Kourt Apartments has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance; however, the award agreements with HUD do not include an indirect cost reimbursement, so there were no indirect costs charged to the federal award programs for the year ended June 30, 2023. River Kourt Apartments has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance; however, the award agreements with HUD do not include an indirect cost reimbursement, so there were no indirect costs charged to the federal award programs for the year ended June 30, 2023.
Title: Subrecipients Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of River Kourt Apartments 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 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 the operations of River Kourt Apartments, it is not intended to and does not present the financial position, changes in net assets, functional expenses, or cash flows of River Kourt Apartments. 2. 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. River Kourt Apartments was awarded a capital advance in the amount of $1,096,400 from HUD in 1996 under Section 811 of the National Affordable Housing Act. The capital advance qualifies as a major program due to continuing compliance requirements associated with this unamortizable mortgage. Also included in this major program is the HUD Project Rental Assistance Contract (PRAC) awarded. These programs are both components of HUD Supportive Housing for Persons with Disabilities, which is the major program. Determination of the amount of federal awards expended for the Section 811 Capital Advance Program is based on the June 30, 2023 balance of the capital advance in accordance with the Uniform Guidance. The balance of the capital advance at June 30, 2023 was $1,096,400. De Minimis Rate Used: Y Rate Explanation: De Minimis Indirect Cost Rate Election River Kourt Apartments has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance; however, the award agreements with HUD do not include an indirect cost reimbursement, so there were no indirect costs charged to the federal award programs for the year ended June 30, 2023. There were no federal awards passed through to subrecipients.

Finding Details

Finding 2023-001
Finding 2023-001 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Eligibility Criteria: In accordance with River Kourt Apartments’ regulatory agreement with HUD for its HUD Section 811 Capital Advance and HUD Section 811 Project Rental Assistance Contract (PRAC), River Kourt Apartments is required to annually recertify its tenants. It is the responsibility of management to design and implement internal controls to ensure the tenants are recertified within the applicable timeframe required by HUD. Condition: River Kourt Apartments did not perform recertifications for all tenants within the timeframe specified by HUD. We noted significant delays in tenant recertification procedures. Cause: There were not properly designed or implemented internal controls to ensure the tenant recertifications were performed in the timeframe required by HUD. Effect: The effect is material non-compliance with the terms of the HUD program listed above. Questioned Costs: None. Repeat Finding: Yes, see Finding 2022-004. Context: We noted from review of the Forms HUD-52670 Schedule of Tenant Assistance Payments Due and other client prepared schedules, several tenants had not been recertified during the fiscal year as required. From the total 20 tenants at June 30, 2023, the annual recertifications for 18 tenants were past due. We selected a sample of 3 tenants from a population of 20 for eligibility testing. The sample was not a statistically valid sample. Our sample of 3 tenants did not reveal any exceptions. Recommendation: We recommend management review the current internal control procedures and implement additional procedures to ensure annual recertifications are performed as required by HUD. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2023-002
Finding 2023-002 Type of Finding: Significant deficiency in internal control over compliance and immaterial noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Reporting Criteria: River Kourt Apartments’ regulatory agreement with HUD and the HUD Uniform Financial Reporting Standards (24 CFR §5.801) require audited financial statements to be submitted to HUD within 90 days of the fiscal year end. HUD may authorize an extension to the 90 day due date. Condition: The annual audit for the fiscal year ended June 30, 2022 was not submitted by the due date as required by HUD. Cause: The audit was not completed within the applicable time frame, so it was not available to be submitted to HUD by the due date. Effect: The effect is immaterial non-compliance with the terms of the HUD program listed above. Questioned Costs: None. Repeat Finding: No. Context: Not applicable. Recommendation: We recommend management design and implement internal controls over compliance to ensure the audit is completed timely and submitted to HUD as required. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2023-003
Finding 2023-003 Type of Finding: Significant deficiency in internal controls over compliance and immaterial noncompliance. Federal Award Program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Procurement Criteria: Pursuant to the Uniform Guidance, for procurements of goods and services made with federal awards, River Kourt Apartments is required to have policies in place that conform with the Procurement Standards as prescribed in 2 CFR §200.318 through §200.320. River Kourt Apartments is required to follow the methods of procurement as prescribed in 2 CFR §200.320. Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Cause of Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Effect of Condition: This increases risk that River Kourt Apartments would not materially comply with the procurement requirement for the major program. Questioned Costs: None. Context: There were no procurements over the de minimis threshold made during the year period ended June 30, 2023; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Repeat Finding: Yes, see Finding 2022-003. Recommendation: We recommend management revise the current policies and procedures to include all required elements for procurement procedures pursuant to 2 CFR §200.318 through §200.320. Procurement methods shall follow the methods as prescribed in 2 CFR §200.320. View of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2023-001
Finding 2023-001 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Eligibility Criteria: In accordance with River Kourt Apartments’ regulatory agreement with HUD for its HUD Section 811 Capital Advance and HUD Section 811 Project Rental Assistance Contract (PRAC), River Kourt Apartments is required to annually recertify its tenants. It is the responsibility of management to design and implement internal controls to ensure the tenants are recertified within the applicable timeframe required by HUD. Condition: River Kourt Apartments did not perform recertifications for all tenants within the timeframe specified by HUD. We noted significant delays in tenant recertification procedures. Cause: There were not properly designed or implemented internal controls to ensure the tenant recertifications were performed in the timeframe required by HUD. Effect: The effect is material non-compliance with the terms of the HUD program listed above. Questioned Costs: None. Repeat Finding: Yes, see Finding 2022-004. Context: We noted from review of the Forms HUD-52670 Schedule of Tenant Assistance Payments Due and other client prepared schedules, several tenants had not been recertified during the fiscal year as required. From the total 20 tenants at June 30, 2023, the annual recertifications for 18 tenants were past due. We selected a sample of 3 tenants from a population of 20 for eligibility testing. The sample was not a statistically valid sample. Our sample of 3 tenants did not reveal any exceptions. Recommendation: We recommend management review the current internal control procedures and implement additional procedures to ensure annual recertifications are performed as required by HUD. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2023-002
Finding 2023-002 Type of Finding: Significant deficiency in internal control over compliance and immaterial noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Reporting Criteria: River Kourt Apartments’ regulatory agreement with HUD and the HUD Uniform Financial Reporting Standards (24 CFR §5.801) require audited financial statements to be submitted to HUD within 90 days of the fiscal year end. HUD may authorize an extension to the 90 day due date. Condition: The annual audit for the fiscal year ended June 30, 2022 was not submitted by the due date as required by HUD. Cause: The audit was not completed within the applicable time frame, so it was not available to be submitted to HUD by the due date. Effect: The effect is immaterial non-compliance with the terms of the HUD program listed above. Questioned Costs: None. Repeat Finding: No. Context: Not applicable. Recommendation: We recommend management design and implement internal controls over compliance to ensure the audit is completed timely and submitted to HUD as required. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2023-003
Finding 2023-003 Type of Finding: Significant deficiency in internal controls over compliance and immaterial noncompliance. Federal Award Program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Procurement Criteria: Pursuant to the Uniform Guidance, for procurements of goods and services made with federal awards, River Kourt Apartments is required to have policies in place that conform with the Procurement Standards as prescribed in 2 CFR §200.318 through §200.320. River Kourt Apartments is required to follow the methods of procurement as prescribed in 2 CFR §200.320. Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Cause of Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Effect of Condition: This increases risk that River Kourt Apartments would not materially comply with the procurement requirement for the major program. Questioned Costs: None. Context: There were no procurements over the de minimis threshold made during the year period ended June 30, 2023; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Repeat Finding: Yes, see Finding 2022-003. Recommendation: We recommend management revise the current policies and procedures to include all required elements for procurement procedures pursuant to 2 CFR §200.318 through §200.320. Procurement methods shall follow the methods as prescribed in 2 CFR §200.320. View of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.