FAC Explorer

Audit 301234

FY End
2023-06-30
Total Expended
$1.41M
Findings
12
Programs
1
Organization: High Street Homes Inc. (MD)
Year: 2023 Accepted: 2024-03-30
Auditor: Gross Mendelsohn & Associates P A

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
390432 2023-002 Material Weakness - N
390433 2023-003 Material Weakness - C
390434 2023-004 Material Weakness - P
390435 2023-002 Material Weakness - N
390436 2023-003 Material Weakness - C
390437 2023-004 Material Weakness - P
966874 2023-002 Material Weakness - N
966875 2023-003 Material Weakness - C
966876 2023-004 Material Weakness - P
966877 2023-002 Material Weakness - N
966878 2023-003 Material Weakness - C
966879 2023-004 Material Weakness - P

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $43,511 Yes 3

Contacts

Name Title Type
GZNHQDC77EA4 Katherine Dannenfelser Auditee
4109965104 Lisa Johnson 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. 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: High Street Homes, Inc. has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of High Street Homes, 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 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 High Street Homes, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of High Street Homes, Inc.
Title: Summary of Significant Accounting Policies 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: High Street Homes, Inc. has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. 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.
Title: Indirect Cost Rate 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: High Street Homes, Inc. has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. High Street Homes, Inc. has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Capital Advance - HUD 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: High Street Homes, Inc. has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project entered into a capital advance agreement with HUD to assist in financing the project under Section 811 of the National Affordable Housing Act and received a capital advance of $1,366,100. The capital advance is secured by a mortgage on the property. The capital advance does not bear interest and is not required to be repaid so long as the housing remains available to eligible very low-income households for 40 years beginning in September 2009. Under the terms of the capital advance agreement, any default would result in HUD billing the Project for the entire capital advance outstanding.

Finding Details

Finding 2023-002
Statement of Condition: As a result of our audit procedures, we noted that High Street Homes, Inc. did not make the monthly required deposits for eleven months and an unapproved withdrawal was made out of the account. Criteria: Management is responsible for reconciling the replacement reserve account on a monthly basis to ensure the activity is accurately recorded on a monthly basis. In addition, request for withdrawals must be submitted to HUD and approved by HUD prior to any withdrawals. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD replacement reserve process to have to assume these duties. Effect: The HUD required monthly deposits were not made and an unapproved withdrawal was made. Recommendation: Replacement reserve account should be reconciled monthly and reviewed to ensure all required deposit activity is made and there are no unapproved withdrawals from the account. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly reporting of Replacement Reserve Account and other HUD information as part of an effort to improve internal financial reporting overall.
Finding 2023-003
Statement of Condition: As a result of our audit procedures, we noted that the monthly rental income from the tenants was not paid to the Project from Upper Bay, who acts as the tenants’ representative payee. Criteria: The Project has entered into a project rental assistance contract under Section 811 of the National Housing Act. Under the contract, the Project will receive monthly rent supplements directly from HUD for qualified tenants. The amount of rent payable by a qualified resident of the apartment building is based on the tenant’s income level. Housing assistance payments are received from HUD for the amount of the difference between an apartment’s contract rent and the amount received from the tenant. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD rental revenue process to have to assume these duties. Effect: The Project did not receive the tenant monthly rental income during the fiscal year. Recommendation: The Project should accurately maintain the monthly rental schedule and reconcile the HUD voucher activity and tenant payments to the general ledger and bank statements. The rental activity should be reconciled monthly and the Director of Finance should review the rental schedule monthly to ensure the reconciliation is accurate and all activity is properly accounted for during the year. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly HUD financial meetings providing the oversight and review needed. Financial staff will submit a report to Senior Management of HUD financial matters on a regular basis.
Finding 2023-004
Statement of Condition: The annual financial statements for the year ended June 30, 2023 were not filed by the required due date of September 30, 2023 to REAC. Criteria: In accordance with HUD requirements, the audited financial statements must be completed and submitted to REAC by September 30, 2023. Cause: Management did not have an approved contract renewal with HUD for the year ended June 30, 2023 until September 27, 2023. The contract renewal application had errors when originally submitted and there was a lack of follow up with HUD due to significant turnover at the Project causing a delay in obtaining HUD approval. As a result, the financial statements could not be properly prepared in time for the submission deadline to be met. Effect: The annual financial statements for the year ended June 30, 2023 were not submitted to REAC in a timely manner. Recommendation: We recommend that management ensure the HUD contract renewal application is completed accurately and submitted timely in order to receive HUD approval at the start of the fiscal year. This is extremely important to ensure the timely submission of the audited financial statements to REAC. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will have Senior Management and Financial staff working together via scheduled internal meetings to ensure the HUD approval at the start of the fiscal year is obtained. The contract renewal application and required follow up will be on the agendas of the internal HUD meetings.
Finding 2023-002
Statement of Condition: As a result of our audit procedures, we noted that High Street Homes, Inc. did not make the monthly required deposits for eleven months and an unapproved withdrawal was made out of the account. Criteria: Management is responsible for reconciling the replacement reserve account on a monthly basis to ensure the activity is accurately recorded on a monthly basis. In addition, request for withdrawals must be submitted to HUD and approved by HUD prior to any withdrawals. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD replacement reserve process to have to assume these duties. Effect: The HUD required monthly deposits were not made and an unapproved withdrawal was made. Recommendation: Replacement reserve account should be reconciled monthly and reviewed to ensure all required deposit activity is made and there are no unapproved withdrawals from the account. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly reporting of Replacement Reserve Account and other HUD information as part of an effort to improve internal financial reporting overall.
Finding 2023-003
Statement of Condition: As a result of our audit procedures, we noted that the monthly rental income from the tenants was not paid to the Project from Upper Bay, who acts as the tenants’ representative payee. Criteria: The Project has entered into a project rental assistance contract under Section 811 of the National Housing Act. Under the contract, the Project will receive monthly rent supplements directly from HUD for qualified tenants. The amount of rent payable by a qualified resident of the apartment building is based on the tenant’s income level. Housing assistance payments are received from HUD for the amount of the difference between an apartment’s contract rent and the amount received from the tenant. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD rental revenue process to have to assume these duties. Effect: The Project did not receive the tenant monthly rental income during the fiscal year. Recommendation: The Project should accurately maintain the monthly rental schedule and reconcile the HUD voucher activity and tenant payments to the general ledger and bank statements. The rental activity should be reconciled monthly and the Director of Finance should review the rental schedule monthly to ensure the reconciliation is accurate and all activity is properly accounted for during the year. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly HUD financial meetings providing the oversight and review needed. Financial staff will submit a report to Senior Management of HUD financial matters on a regular basis.
Finding 2023-004
Statement of Condition: The annual financial statements for the year ended June 30, 2023 were not filed by the required due date of September 30, 2023 to REAC. Criteria: In accordance with HUD requirements, the audited financial statements must be completed and submitted to REAC by September 30, 2023. Cause: Management did not have an approved contract renewal with HUD for the year ended June 30, 2023 until September 27, 2023. The contract renewal application had errors when originally submitted and there was a lack of follow up with HUD due to significant turnover at the Project causing a delay in obtaining HUD approval. As a result, the financial statements could not be properly prepared in time for the submission deadline to be met. Effect: The annual financial statements for the year ended June 30, 2023 were not submitted to REAC in a timely manner. Recommendation: We recommend that management ensure the HUD contract renewal application is completed accurately and submitted timely in order to receive HUD approval at the start of the fiscal year. This is extremely important to ensure the timely submission of the audited financial statements to REAC. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will have Senior Management and Financial staff working together via scheduled internal meetings to ensure the HUD approval at the start of the fiscal year is obtained. The contract renewal application and required follow up will be on the agendas of the internal HUD meetings.
Finding 2023-002
Statement of Condition: As a result of our audit procedures, we noted that High Street Homes, Inc. did not make the monthly required deposits for eleven months and an unapproved withdrawal was made out of the account. Criteria: Management is responsible for reconciling the replacement reserve account on a monthly basis to ensure the activity is accurately recorded on a monthly basis. In addition, request for withdrawals must be submitted to HUD and approved by HUD prior to any withdrawals. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD replacement reserve process to have to assume these duties. Effect: The HUD required monthly deposits were not made and an unapproved withdrawal was made. Recommendation: Replacement reserve account should be reconciled monthly and reviewed to ensure all required deposit activity is made and there are no unapproved withdrawals from the account. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly reporting of Replacement Reserve Account and other HUD information as part of an effort to improve internal financial reporting overall.
Finding 2023-003
Statement of Condition: As a result of our audit procedures, we noted that the monthly rental income from the tenants was not paid to the Project from Upper Bay, who acts as the tenants’ representative payee. Criteria: The Project has entered into a project rental assistance contract under Section 811 of the National Housing Act. Under the contract, the Project will receive monthly rent supplements directly from HUD for qualified tenants. The amount of rent payable by a qualified resident of the apartment building is based on the tenant’s income level. Housing assistance payments are received from HUD for the amount of the difference between an apartment’s contract rent and the amount received from the tenant. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD rental revenue process to have to assume these duties. Effect: The Project did not receive the tenant monthly rental income during the fiscal year. Recommendation: The Project should accurately maintain the monthly rental schedule and reconcile the HUD voucher activity and tenant payments to the general ledger and bank statements. The rental activity should be reconciled monthly and the Director of Finance should review the rental schedule monthly to ensure the reconciliation is accurate and all activity is properly accounted for during the year. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly HUD financial meetings providing the oversight and review needed. Financial staff will submit a report to Senior Management of HUD financial matters on a regular basis.
Finding 2023-004
Statement of Condition: The annual financial statements for the year ended June 30, 2023 were not filed by the required due date of September 30, 2023 to REAC. Criteria: In accordance with HUD requirements, the audited financial statements must be completed and submitted to REAC by September 30, 2023. Cause: Management did not have an approved contract renewal with HUD for the year ended June 30, 2023 until September 27, 2023. The contract renewal application had errors when originally submitted and there was a lack of follow up with HUD due to significant turnover at the Project causing a delay in obtaining HUD approval. As a result, the financial statements could not be properly prepared in time for the submission deadline to be met. Effect: The annual financial statements for the year ended June 30, 2023 were not submitted to REAC in a timely manner. Recommendation: We recommend that management ensure the HUD contract renewal application is completed accurately and submitted timely in order to receive HUD approval at the start of the fiscal year. This is extremely important to ensure the timely submission of the audited financial statements to REAC. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will have Senior Management and Financial staff working together via scheduled internal meetings to ensure the HUD approval at the start of the fiscal year is obtained. The contract renewal application and required follow up will be on the agendas of the internal HUD meetings.
Finding 2023-002
Statement of Condition: As a result of our audit procedures, we noted that High Street Homes, Inc. did not make the monthly required deposits for eleven months and an unapproved withdrawal was made out of the account. Criteria: Management is responsible for reconciling the replacement reserve account on a monthly basis to ensure the activity is accurately recorded on a monthly basis. In addition, request for withdrawals must be submitted to HUD and approved by HUD prior to any withdrawals. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD replacement reserve process to have to assume these duties. Effect: The HUD required monthly deposits were not made and an unapproved withdrawal was made. Recommendation: Replacement reserve account should be reconciled monthly and reviewed to ensure all required deposit activity is made and there are no unapproved withdrawals from the account. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly reporting of Replacement Reserve Account and other HUD information as part of an effort to improve internal financial reporting overall.
Finding 2023-003
Statement of Condition: As a result of our audit procedures, we noted that the monthly rental income from the tenants was not paid to the Project from Upper Bay, who acts as the tenants’ representative payee. Criteria: The Project has entered into a project rental assistance contract under Section 811 of the National Housing Act. Under the contract, the Project will receive monthly rent supplements directly from HUD for qualified tenants. The amount of rent payable by a qualified resident of the apartment building is based on the tenant’s income level. Housing assistance payments are received from HUD for the amount of the difference between an apartment’s contract rent and the amount received from the tenant. Cause: There was significant turnover of key personnel in the Finance department during the year, causing new personnel who were inexperienced with the HUD rental revenue process to have to assume these duties. Effect: The Project did not receive the tenant monthly rental income during the fiscal year. Recommendation: The Project should accurately maintain the monthly rental schedule and reconcile the HUD voucher activity and tenant payments to the general ledger and bank statements. The rental activity should be reconciled monthly and the Director of Finance should review the rental schedule monthly to ensure the reconciliation is accurate and all activity is properly accounted for during the year. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will implement monthly HUD financial meetings providing the oversight and review needed. Financial staff will submit a report to Senior Management of HUD financial matters on a regular basis.
Finding 2023-004
Statement of Condition: The annual financial statements for the year ended June 30, 2023 were not filed by the required due date of September 30, 2023 to REAC. Criteria: In accordance with HUD requirements, the audited financial statements must be completed and submitted to REAC by September 30, 2023. Cause: Management did not have an approved contract renewal with HUD for the year ended June 30, 2023 until September 27, 2023. The contract renewal application had errors when originally submitted and there was a lack of follow up with HUD due to significant turnover at the Project causing a delay in obtaining HUD approval. As a result, the financial statements could not be properly prepared in time for the submission deadline to be met. Effect: The annual financial statements for the year ended June 30, 2023 were not submitted to REAC in a timely manner. Recommendation: We recommend that management ensure the HUD contract renewal application is completed accurately and submitted timely in order to receive HUD approval at the start of the fiscal year. This is extremely important to ensure the timely submission of the audited financial statements to REAC. Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support Services, Inc. will have Senior Management and Financial staff working together via scheduled internal meetings to ensure the HUD approval at the start of the fiscal year is obtained. The contract renewal application and required follow up will be on the agendas of the internal HUD meetings.