FAC Explorer

Audit 305488

FY End
2023-12-31
Total Expended
$920,777
Findings
2
Programs
2
Organization: Marion Street Apartments, Inc. (OR)
Year: 2023 Accepted: 2024-05-03
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
395868 2023-001 Significant Deficiency Yes E
972310 2023-001 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
99.999 Low Income Housing Preservation and Residential Homeownership Act of 1990 $776,248 Yes 1
14.195 Section 8 Housing Assistance Payments Program $144,529 - 0

Contacts

Name Title Type
MCEYM45WKMH4 Tekle Bushen Auditee
5035196012 Karen Smith Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - 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 OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Marion Street Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Auditee does not use the deminis cost rate The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Marion Street Apartments, Inc., HUD Project No.: 126-44028 (the "Company") 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 Company, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Company.
Title: Note 2 - 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 OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Marion Street Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Auditee does not use the deminis 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 OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Marion Street Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
Finding No. 2023-001; Federal Assistance Listing Number 99.999 Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file testing: 1. one out of three tenant files tested did not have a recertification performed timely. 2. one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Cause Management's policies with respect to the determination of tenant recertifications and eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant recertifications are performed timely and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs N/A Context One out of two tenant files tested did not have a recertification performed timely. And one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Repeat Finding Yes, 2022-003 Recommendation Management should monitor compliance with their procedures to ensure that tenant recertifications are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: E - Eligibility for Uniform Guidance R - Section 8 Program Administration Finding Resolution Status: Unresolved Views of Responsible Officials and Planned Corrective Actions REACH has policies in place to complete certifications in a timely manner and ensure income support is received for income certifications. Due to staffing shortages and tenant noncompliance issues, the property had issues with compiling the necessary information to complete the income certifications in 2023. As new staff are brought onboard, training is provided and annual HUD training is completed by all staff. Additional procedures have been implemented in 2023 to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.
Finding 2023-001
Finding No. 2023-001; Federal Assistance Listing Number 99.999 Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file testing: 1. one out of three tenant files tested did not have a recertification performed timely. 2. one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Cause Management's policies with respect to the determination of tenant recertifications and eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant recertifications are performed timely and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs N/A Context One out of two tenant files tested did not have a recertification performed timely. And one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Repeat Finding Yes, 2022-003 Recommendation Management should monitor compliance with their procedures to ensure that tenant recertifications are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: E - Eligibility for Uniform Guidance R - Section 8 Program Administration Finding Resolution Status: Unresolved Views of Responsible Officials and Planned Corrective Actions REACH has policies in place to complete certifications in a timely manner and ensure income support is received for income certifications. Due to staffing shortages and tenant noncompliance issues, the property had issues with compiling the necessary information to complete the income certifications in 2023. As new staff are brought onboard, training is provided and annual HUD training is completed by all staff. Additional procedures have been implemented in 2023 to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.