FAC Explorer

Audit 303143

FY End
2023-12-31
Total Expended
$2.71M
Findings
4
Programs
2
Organization: Lss Manor, Inc. - New Berlin (WI)
Year: 2023 Accepted: 2024-04-10
Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392811 2023-002 Significant Deficiency - N
392812 2023-002 Significant Deficiency - N
969253 2023-002 Significant Deficiency - N
969254 2023-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly, Capital Advance $2.53M Yes 1
14.157 Supportive Housing for the Elderly, Section 8 Project Rental Assistance Contract $175,082 Yes 1

Contacts

Name Title Type
H5HNMDM8G4N5 Randall Oleszak Auditee
4142462353 Krista Pankop 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, as applicable, either the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Project 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 award activity of LSS Manor, Inc. - New Berlin (the Project) under programs of the federal government for the year ended December 31, 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 the Project, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Project.
Title: Capital Advance Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The capital advance balance at the beginning of the year is included in the federal expenditures presented in the Schedule. This is also the balance at December 31, 2023.

Finding Details

Finding 2023-002
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.157, Supportive Housing for the Elderly Criteria: The Project is required to have processes and controls in place to ensure appropriate and allowable amounts are charged to the Project. 24 CFR Section 891.400(e) and 891.600(e) outline the required uses of project funds for only operational purposes of the Project. Statement of condition: The Project was overcharged salary and related benefits. The amount was identified during the audit and was corrected by management during the year ending December 31, 2023. Questioned Costs: Questioned costs totaled $21,005. Context: One individual's payroll and benefits were inappropriately charged to the Project. Upon further investigating, four (4) total individuals were impacted by the changes in staffing assignments, but further testing verified the other individuals were accurately charged to the correct programs. Effect: The Project was charged payroll and related benefits that were not for operational purposes of the Project. Cause: Controls in place overlooked changes in staffing assignments, which led to additional charges to the Project that did not relate to the Project. Recommendation: We recommend management review their processes and controls surrounding payroll and benefits to ensure appropriate amounts are charged to the Project. Management's response: Leadership training around the importance of proper time allocation and methods for tracking and confirming proper time recording was held in January of 2024. LSS payroll department leadership presented this training in conjunction with housing department senior leadership. All LSS HUD property management staff is scheduled to receive this training in March of 2024. In addition, all HUD property managers were provided copies of their budgeted hours for each of their Projects. HUD property management staff was reminded of the importance of striving to stay within those hours, and of proactively working with leadership should project needs necessitate change. Housing Senior Leadership meets monthly with HUD leadership. In these meetings emphasis will be placed on reviewing actual versus budgeted results related to payroll costs. Leadership will work with LSS finance staff to investigate the validity in variances identified.
Finding 2023-002
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.157, Supportive Housing for the Elderly Criteria: The Project is required to have processes and controls in place to ensure appropriate and allowable amounts are charged to the Project. 24 CFR Section 891.400(e) and 891.600(e) outline the required uses of project funds for only operational purposes of the Project. Statement of condition: The Project was overcharged salary and related benefits. The amount was identified during the audit and was corrected by management during the year ending December 31, 2023. Questioned Costs: Questioned costs totaled $21,005. Context: One individual's payroll and benefits were inappropriately charged to the Project. Upon further investigating, four (4) total individuals were impacted by the changes in staffing assignments, but further testing verified the other individuals were accurately charged to the correct programs. Effect: The Project was charged payroll and related benefits that were not for operational purposes of the Project. Cause: Controls in place overlooked changes in staffing assignments, which led to additional charges to the Project that did not relate to the Project. Recommendation: We recommend management review their processes and controls surrounding payroll and benefits to ensure appropriate amounts are charged to the Project. Management's response: Leadership training around the importance of proper time allocation and methods for tracking and confirming proper time recording was held in January of 2024. LSS payroll department leadership presented this training in conjunction with housing department senior leadership. All LSS HUD property management staff is scheduled to receive this training in March of 2024. In addition, all HUD property managers were provided copies of their budgeted hours for each of their Projects. HUD property management staff was reminded of the importance of striving to stay within those hours, and of proactively working with leadership should project needs necessitate change. Housing Senior Leadership meets monthly with HUD leadership. In these meetings emphasis will be placed on reviewing actual versus budgeted results related to payroll costs. Leadership will work with LSS finance staff to investigate the validity in variances identified.
Finding 2023-002
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.157, Supportive Housing for the Elderly Criteria: The Project is required to have processes and controls in place to ensure appropriate and allowable amounts are charged to the Project. 24 CFR Section 891.400(e) and 891.600(e) outline the required uses of project funds for only operational purposes of the Project. Statement of condition: The Project was overcharged salary and related benefits. The amount was identified during the audit and was corrected by management during the year ending December 31, 2023. Questioned Costs: Questioned costs totaled $21,005. Context: One individual's payroll and benefits were inappropriately charged to the Project. Upon further investigating, four (4) total individuals were impacted by the changes in staffing assignments, but further testing verified the other individuals were accurately charged to the correct programs. Effect: The Project was charged payroll and related benefits that were not for operational purposes of the Project. Cause: Controls in place overlooked changes in staffing assignments, which led to additional charges to the Project that did not relate to the Project. Recommendation: We recommend management review their processes and controls surrounding payroll and benefits to ensure appropriate amounts are charged to the Project. Management's response: Leadership training around the importance of proper time allocation and methods for tracking and confirming proper time recording was held in January of 2024. LSS payroll department leadership presented this training in conjunction with housing department senior leadership. All LSS HUD property management staff is scheduled to receive this training in March of 2024. In addition, all HUD property managers were provided copies of their budgeted hours for each of their Projects. HUD property management staff was reminded of the importance of striving to stay within those hours, and of proactively working with leadership should project needs necessitate change. Housing Senior Leadership meets monthly with HUD leadership. In these meetings emphasis will be placed on reviewing actual versus budgeted results related to payroll costs. Leadership will work with LSS finance staff to investigate the validity in variances identified.
Finding 2023-002
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.157, Supportive Housing for the Elderly Criteria: The Project is required to have processes and controls in place to ensure appropriate and allowable amounts are charged to the Project. 24 CFR Section 891.400(e) and 891.600(e) outline the required uses of project funds for only operational purposes of the Project. Statement of condition: The Project was overcharged salary and related benefits. The amount was identified during the audit and was corrected by management during the year ending December 31, 2023. Questioned Costs: Questioned costs totaled $21,005. Context: One individual's payroll and benefits were inappropriately charged to the Project. Upon further investigating, four (4) total individuals were impacted by the changes in staffing assignments, but further testing verified the other individuals were accurately charged to the correct programs. Effect: The Project was charged payroll and related benefits that were not for operational purposes of the Project. Cause: Controls in place overlooked changes in staffing assignments, which led to additional charges to the Project that did not relate to the Project. Recommendation: We recommend management review their processes and controls surrounding payroll and benefits to ensure appropriate amounts are charged to the Project. Management's response: Leadership training around the importance of proper time allocation and methods for tracking and confirming proper time recording was held in January of 2024. LSS payroll department leadership presented this training in conjunction with housing department senior leadership. All LSS HUD property management staff is scheduled to receive this training in March of 2024. In addition, all HUD property managers were provided copies of their budgeted hours for each of their Projects. HUD property management staff was reminded of the importance of striving to stay within those hours, and of proactively working with leadership should project needs necessitate change. Housing Senior Leadership meets monthly with HUD leadership. In these meetings emphasis will be placed on reviewing actual versus budgeted results related to payroll costs. Leadership will work with LSS finance staff to investigate the validity in variances identified.