Audit 305573

FY End
2023-12-31
Total Expended
$10.91M
Findings
2
Programs
1
Organization: Hartford Village (MI)
Year: 2023 Accepted: 2024-05-06
Auditor: Maner Costerisan

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
395924 2023-001 Significant Deficiency - J
972366 2023-001 Significant Deficiency - J

Programs

ALN Program Spent Major Findings
14.138 Mortgage Insurance_rental Housing for the Elderly $10.91M Yes 1

Contacts

Name Title Type
K5BAKTTJ3HN5 Bruce Blalock Auditee
2482812033 Keith R. Pfeifle, CPA 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 the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Hartford Village has elected not to use the 10-percent 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 Hartford Village 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 Hartford Village, it is not intended to and does not present the financial position, changes in net assets or cash flows of Hartford Village.
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 the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Hartford Village has elected not to use the 10-percent 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. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. Hartford Village has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 3 - 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 the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Hartford Village has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Hartford Village has a mortgage insured by U.S. Department of Housing and Urban Development under Section 231 of the National Housing Act. The mortgage is included in the federal expenditures presented in the Schedule. Hartford Village received no additional capital advances, or loans, during the year. The balance of the mortgage at December 31, 2023, was $10,741,937.

Finding Details

Finding 2023-001 - Considered a significant deficiency in internal control over compliance. Federal Program: Mortgage Insurance for Rental Housing for the Elderly ALN #: 14.138 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Criteria: Corporation management is responsible for ensuring the management fees are paid in accordance with the HUD approved management certification. Condition: The Corporation overpaid management fees by $8,928 for the year ended December 31, 2023. Questioned Costs: $8,928 Cause: Corporation did not adjust the HUD-prescribed percentage of rental and other receipts used to calculate management fees after increasing rent rates during 2023. Effect: Management fees were overpaid for the year ended December 31, 2023. Recommendation: The HUD-prescribed percentage of rental and other receipts used to calculate management fees should be adjusted after changes to rent rates to ensure that the management fees charged are under the per-unit-per-month amount outlines in the management agent certification. Management Comments: We agree with the facts and circumstances of this finding and will pay back the $8,928 that is owed back to the Corporation. Auditor Noncompliance Code: J - Unauthorized management fees
Finding 2023-001 - Considered a significant deficiency in internal control over compliance. Federal Program: Mortgage Insurance for Rental Housing for the Elderly ALN #: 14.138 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Criteria: Corporation management is responsible for ensuring the management fees are paid in accordance with the HUD approved management certification. Condition: The Corporation overpaid management fees by $8,928 for the year ended December 31, 2023. Questioned Costs: $8,928 Cause: Corporation did not adjust the HUD-prescribed percentage of rental and other receipts used to calculate management fees after increasing rent rates during 2023. Effect: Management fees were overpaid for the year ended December 31, 2023. Recommendation: The HUD-prescribed percentage of rental and other receipts used to calculate management fees should be adjusted after changes to rent rates to ensure that the management fees charged are under the per-unit-per-month amount outlines in the management agent certification. Management Comments: We agree with the facts and circumstances of this finding and will pay back the $8,928 that is owed back to the Corporation. Auditor Noncompliance Code: J - Unauthorized management fees