FAC Explorer

Audit 303580

FY End
2023-12-31
Total Expended
$4.51M
Findings
4
Programs
1
Organization: B'nai B'rith Iii, Inc. (MA)
Year: 2023 Accepted: 2024-04-16
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
393286 2023-001 - - E
393287 2023-002 Material Weakness Yes N
969728 2023-001 - - E
969729 2023-002 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $4.51M Yes 2

Contacts

Name Title Type
T83QFS5DEQ77 Tyler Munsinger Auditee
6175328617 Philip Weitzel 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, the cost principles contained in the Uniform Guidance. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards includes the federal award activity of B'nai B'rith III, Inc., HUD Project No.: 023-EE-116, 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 B'nai B'rith III, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of B'nai B'rith III, Inc. For the year ended December 31, 2023, no awards were passed through to subrecipients.
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, as applicable, the cost principles contained in the Uniform Guidance. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under 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, as applicable, the cost principles contained in the Uniform Guidance. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: U.S. Department of Housing and Urban Development loan program Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance. B'nai B'rith III, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. B'nai B'rith III, Inc. has received a U.S. Department of Housing and Urban Development capital advance under Section 202 of the Capital Advance Agreement. The capital advance balance outstanding at the beginning of the period is included in the federal expenditures presented in the Schedule. B'nai B'rith III, Inc. received no additional capital advances during the period. The balance of the capital advance outstanding at December 31, 2023, consists of:

Finding Details

Finding 2023-001
Finding No. HUD 2023-1; Section 202 Capital Advance, CFDA 14.157 Statement of Condition In connection with our lease file testing, we noted that two out of five tenant files did not have an EIV run within 120 days of the annual recertification date. Criteria In accordance with HUD program guidelines under which the Project operates, the EIV is required to be run within 120 days of the annual recertification date. Context A sample of five tenant files were selected from a population of 42. We identified exceptions in two out of the five files tested. The sample was not statistically valid. Effect The Corporation could be required to concede rent to these tenants, as applicable in the individual circumstances. Cause Personnel responsible for tenant recertification failed to run EIVs up to 120 days prior to the effective date of the recertification. Repeat Finding This finding is not a repeat finding. Recommendation The Corporation should ensure that EIVs are run timely up to 120 days prior to the annual recertification date. Auditor Noncompliance Code: R. Section 8 program administration Finding Resolution Status: Resolved Views of Responsible Officials Management concurs with the finding and has communicated with the staff, the importance of timely EIV reporting. On a going forward basis, management will enhance its monitoring of compliance with this requirement to ensure EIVs are run within an appropriate time frame.
Finding 2023-002
Finding No. HUD 2023-2; Section 202 Capital Advance, CFDA 14.157 Statement of Condition During the year ended December 31, 2023, the project did not make the required monthly deposits to the replacement reserve on a monthly basis as required under the HUD Program and, as of December 31, 2023, was deficient in the required annual deposits to the reserve in the amount of $2,963. Criteria The program documents with HUD require that the project make monthly deposits to its replacement reserve. Context The replacement reserve activity during the year ended December 31, 2023 was reviewed. We identified instances where the deposits were not made on a monthly basis or at the correct monthly amounts. We also determined that the total deposits made for the year did not aggregate to the required annual deposits required to be made to the replacement reserve. Effect Failure to make payments on a monthly basis and at the required amounts resulted in an underfunding of the replacement reserve and a violation of the HUD agreement. Cause Management did not make deposits on a timely basis or in the correct amounts to the replacement reserve required to be established and maintained by HUD. Repeat Finding This finding is a repeat finding (see prior year finding #2022-1). Recommendation Management should review its process for identifying the required monthly deposit amount and it process for ensuring that transfers to the replacement reserve are made in a timely manner. Auditor Noncompliance Code: N. Reserve for replacements deposits Finding Resolution Status: In process Views of Responsible Officials Management concurs with the finding. Management funded the $2,963 shortfall on February 16, 2024. In addition, management has communicated with the staff the importance of timely replacement reserve deposits and compliance with this requirement to ensure that all required deposits are made as established by HUD. In addition, management will implement a process to transfer the funds via an ACH process to ensure time funding of the reserve.
Finding 2023-001
Finding No. HUD 2023-1; Section 202 Capital Advance, CFDA 14.157 Statement of Condition In connection with our lease file testing, we noted that two out of five tenant files did not have an EIV run within 120 days of the annual recertification date. Criteria In accordance with HUD program guidelines under which the Project operates, the EIV is required to be run within 120 days of the annual recertification date. Context A sample of five tenant files were selected from a population of 42. We identified exceptions in two out of the five files tested. The sample was not statistically valid. Effect The Corporation could be required to concede rent to these tenants, as applicable in the individual circumstances. Cause Personnel responsible for tenant recertification failed to run EIVs up to 120 days prior to the effective date of the recertification. Repeat Finding This finding is not a repeat finding. Recommendation The Corporation should ensure that EIVs are run timely up to 120 days prior to the annual recertification date. Auditor Noncompliance Code: R. Section 8 program administration Finding Resolution Status: Resolved Views of Responsible Officials Management concurs with the finding and has communicated with the staff, the importance of timely EIV reporting. On a going forward basis, management will enhance its monitoring of compliance with this requirement to ensure EIVs are run within an appropriate time frame.
Finding 2023-002
Finding No. HUD 2023-2; Section 202 Capital Advance, CFDA 14.157 Statement of Condition During the year ended December 31, 2023, the project did not make the required monthly deposits to the replacement reserve on a monthly basis as required under the HUD Program and, as of December 31, 2023, was deficient in the required annual deposits to the reserve in the amount of $2,963. Criteria The program documents with HUD require that the project make monthly deposits to its replacement reserve. Context The replacement reserve activity during the year ended December 31, 2023 was reviewed. We identified instances where the deposits were not made on a monthly basis or at the correct monthly amounts. We also determined that the total deposits made for the year did not aggregate to the required annual deposits required to be made to the replacement reserve. Effect Failure to make payments on a monthly basis and at the required amounts resulted in an underfunding of the replacement reserve and a violation of the HUD agreement. Cause Management did not make deposits on a timely basis or in the correct amounts to the replacement reserve required to be established and maintained by HUD. Repeat Finding This finding is a repeat finding (see prior year finding #2022-1). Recommendation Management should review its process for identifying the required monthly deposit amount and it process for ensuring that transfers to the replacement reserve are made in a timely manner. Auditor Noncompliance Code: N. Reserve for replacements deposits Finding Resolution Status: In process Views of Responsible Officials Management concurs with the finding. Management funded the $2,963 shortfall on February 16, 2024. In addition, management has communicated with the staff the importance of timely replacement reserve deposits and compliance with this requirement to ensure that all required deposits are made as established by HUD. In addition, management will implement a process to transfer the funds via an ACH process to ensure time funding of the reserve.