Audit 304553

FY End
2023-12-31
Total Expended
$2.93M
Findings
4
Programs
3
Year: 2023 Accepted: 2024-04-25

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
394644 2023-001 Significant Deficiency - I
394645 2023-002 Significant Deficiency - L
971086 2023-001 Significant Deficiency - I
971087 2023-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $2.53M Yes 2
14.871 Section 8 Housing Choice Vouchers $198,506 - 0
14.218 Community Development Block Grants/entitlement Grants $194,904 - 0

Contacts

Name Title Type
CV6UCJCKY613 Nicole Chwala Auditee
9202064930 Dawn Yarrington Auditor
No contacts on file

Notes to SEFA

Title: SUBRECIPIENT Accounting Policies: BASIS OF PRESENTATION The accompanying "Schedule of Expenditures of Federal Awards" (the Schedule) includes the federal award activity of the ILI Senior Housing - Chapel Valley Road Inc. under programs of the federal government for the year ended December 31, 2023. The information in the schedule is presented in accordance with the requirement of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in the preparation of, the financial statements. SUMMARRY OF SIGNIFICANT 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 principle in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Corporation has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Of the federal expenditures presented in the Schedule, the Corporation did not provide federal awards to subrecipients during the year of December 31, 2023.
Title: FEDERAL LOAN PROGRAM Accounting Policies: BASIS OF PRESENTATION The accompanying "Schedule of Expenditures of Federal Awards" (the Schedule) includes the federal award activity of the ILI Senior Housing - Chapel Valley Road Inc. under programs of the federal government for the year ended December 31, 2023. The information in the schedule is presented in accordance with the requirement of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in the preparation of, the financial statements. SUMMARRY OF SIGNIFICANT 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 principle in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Corporation has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule related to the U.S. Department of Housing and Urban Development capital advance under Section 202 of the Housing Act of 1959 and a Community Development Block Grants/Entitlement Grant Loan. Loans outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding as of December 31, 2023 consists of: SUPPORTIVE HOUSING FOR THE ELDERLY (14.157) - $2,531,700. COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - $194,904.

Finding Details

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 24 U.S. Code of Federal Regulations, Section 891.400 and the Corporation's Regulatory Agreement require the Corporation to request and obtain approval from HUD for all withdrawals from the residual receipts fund. Condition: The Corporation withdrew funds from the residual receipts account in order to remit back HUD, however the management company paid HUD on behalf of the Corporation. Proper approval was not obtained to withdraw the funds used to pay back the management company. Questioned costs: $91,063 Context: Noncompliance was identified as a result of sampling withdrawals from the residual receipts account. Cause: The Corporation withdrew funds from the residual receipts account to repay the management company, however existing controls and processes did not request approval from HUD prior to withdrawing the funds. Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management obtain approval from HUD prior to making a withdraw from the residual receipts account. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards requires compliance with the provisions of the regulatory agreement. The Corporation should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that the Corporation did not have adequate internal controls designed to ensure that required monthly deposits to the replacement reserve fund were made in a timely manner. Questioned costs: None noted. Context: Noncompliance was identified as a result of testing the required deposits to the replacement reserve fund. Cause: The Corporation did not deposit the November and December deposits until January 2024 Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are made in a timely manner in accordance with the regulatory agreement. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 24 U.S. Code of Federal Regulations, Section 891.400 and the Corporation's Regulatory Agreement require the Corporation to request and obtain approval from HUD for all withdrawals from the residual receipts fund. Condition: The Corporation withdrew funds from the residual receipts account in order to remit back HUD, however the management company paid HUD on behalf of the Corporation. Proper approval was not obtained to withdraw the funds used to pay back the management company. Questioned costs: $91,063 Context: Noncompliance was identified as a result of sampling withdrawals from the residual receipts account. Cause: The Corporation withdrew funds from the residual receipts account to repay the management company, however existing controls and processes did not request approval from HUD prior to withdrawing the funds. Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management obtain approval from HUD prior to making a withdraw from the residual receipts account. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards requires compliance with the provisions of the regulatory agreement. The Corporation should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that the Corporation did not have adequate internal controls designed to ensure that required monthly deposits to the replacement reserve fund were made in a timely manner. Questioned costs: None noted. Context: Noncompliance was identified as a result of testing the required deposits to the replacement reserve fund. Cause: The Corporation did not deposit the November and December deposits until January 2024 Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are made in a timely manner in accordance with the regulatory agreement. Views of responsible officials: Management agrees with the finding.