Audit 300801

FY End

2023-06-30

Total Expended

$913,194

Findings

2

Programs

1

Organization: Hickernell Homes, INC (MD)

Year: 2023 Accepted: 2024-03-29

Auditor: Pkf O'Connor Davies LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
389907	2023-001	-	-	N
966349	2023-001	-	-	N

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$80,494	Yes	0

Contacts

Name	Title	Type
PMJQP2MJP3K4	Kelly Savoca	Auditee
4102072092	Stewart Grubman	Auditor
No contacts on file

Notes to SEFA

Title: Loans/Loans Guarantee Outstanding Balance Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (the “Schedule”) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Schedule includes the federal award activity of Hickernell Homes, Inc. (the “Entity”) 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 the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Entity. De Minimis Rate Used: N Rate Explanation: The Entity has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Entity is reimbursed for programmatic and administrative costs in accordance with rules set forth by the U.S. Department of Housing and Urban Development. Balance of loan outstanding at June 30, 2023 is as follows: Federal Assistance Listing Number 14.181 Supporting Housing for Persons with Disabilities - Capital Advance Program is $832,700.

Title: Federal Loan Program Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (the “Schedule”) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Schedule includes the federal award activity of Hickernell Homes, Inc. (the “Entity”) 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 the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Entity. De Minimis Rate Used: N Rate Explanation: The Entity has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Entity is reimbursed for programmatic and administrative costs in accordance with rules set forth by the U.S. Department of Housing and Urban Development. The Entity received a U.S. Department of Housing and Urban Development Capital Advance under Section 811 of the National Affordable Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. The Entity received no additional loans during the year.

Finding Details

Finding 2023-001

Finding No. 2023-002 – Replacement Reserves Funding Information on the Universe Population Size Replacement reserve activity for the year ended June 30, 2023. Sample Size Information N/A Criteria The regulatory agreement requires monthly payments to fund the replacement reserve. Statement of Condition The Replacement Reserve account was underfunded by $96. Cause The cause of the missing payments was due to management oversight. Effect or Potential Effect The Replacement Reserve account was underfunded by $96. Auditor Non-Compliance Code N- Reserve for Replacements Deposits Questioned Costs There were no known questioned costs. Perspective The finding represents an isolated instance of management oversight. Repeat finding No Recommendations Auditor recommends that the Entity fund the reserve immediately to make it current and create a better system of controls to ensure no future occurrences. Auditor notes deposit was made prior to issuance of the financial statements. No further action required. Views of Responsible officials We agree with this finding and have taken steps to prevent this from occurring in the future and will make an additional deposit to fully fund the replacement reserve bank account and will establish a system of automatic monthly payments in order to properly fund the account going forward. Additionally, the senior accountant on a monthly basis will review the replacement reserve account to ensure automatic payments are timely. No further action is required.

Finding 2023-001

Finding No. 2023-002 – Replacement Reserves Funding Information on the Universe Population Size Replacement reserve activity for the year ended June 30, 2023. Sample Size Information N/A Criteria The regulatory agreement requires monthly payments to fund the replacement reserve. Statement of Condition The Replacement Reserve account was underfunded by $96. Cause The cause of the missing payments was due to management oversight. Effect or Potential Effect The Replacement Reserve account was underfunded by $96. Auditor Non-Compliance Code N- Reserve for Replacements Deposits Questioned Costs There were no known questioned costs. Perspective The finding represents an isolated instance of management oversight. Repeat finding No Recommendations Auditor recommends that the Entity fund the reserve immediately to make it current and create a better system of controls to ensure no future occurrences. Auditor notes deposit was made prior to issuance of the financial statements. No further action required. Views of Responsible officials We agree with this finding and have taken steps to prevent this from occurring in the future and will make an additional deposit to fully fund the replacement reserve bank account and will establish a system of automatic monthly payments in order to properly fund the account going forward. Additionally, the senior accountant on a monthly basis will review the replacement reserve account to ensure automatic payments are timely. No further action is required.