S3800-010: Finding Reference Number
2023-001 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Financial Statement and Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
The regulatory agreement requires that the Organization’s books and records are maintained in
accordance with HUD guidelines and generally accepted accounting principles.
S3800-030: Statement of Condition
Several misstatements were identified by the auditor in the unaudited financial statements and
accounts of the Organization.
S3800-032: Cause
The Organization lacks adequate internal controls to ensure that books and records are kept
accurately and completely.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with the regulatory agreement requirement to maintain
accurate and complete books and accounts.
S3800-035: Auditor Non-Compliance Code
S – Internal Control Deficiencies
S3800-040: Questioned Costs
None
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
On the general ledger, various accounts such as rent, vacancies, and escrow accounts did not
tie to supporting documentation. The Organization did not capitalize the fixed assets as per the
capitalization policy. The cash balance in general ledger did not tie the bank reconciliation
statement.
S3800-080: Recommendation
The Auditor recommends the Organization follows their policies and procedures to ensure that
accounting records are kept accurate and complete, and a responsible official should review and
sign off on the monthly financial statements.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-002 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
2022-002
S3800-020: Criteria
HUD Form-9250, Funds Authorizations, requires the Organization to deposit $1,842 into the
replacement reserve account on a monthly basis.
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization failed to make the required monthly deposits into the reserve
for replacement account for all twelve months. The Organization deposited monthly $1,796 as
opposed to the approved $1,842.
S3800-032: Cause
The Organization deposited the prior required monthly amount into the reserve for replacement
account.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with the regulatory agreement to make required monthly
deposits into the reserve for replacement account.
S3800-035: Auditor Non-Compliance Code:
N – Reserve for replacements deposits
S3800-040: Questioned Costs
$544
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization deposited $21,560 onto the reserve for replacement account during the year
ended December 31, 2023. The Organization was required to deposit $22,104 for the year. Per
Missouri Housing Development Commission (HUD’s designee), the Organization was required to
increase the monthly deposit to the reserve for replacement account from $1,796 to $1,842
effective June 1, 2019. The $544 questioned costs only accounts for the current fiscal year
underfunding.
S3800-080: Recommendation
The Organization should deposit the shortfall of $544 into the reserve for replacement account,
as well as the shortfall for 2019, 2020, 2021 and 2022, as soon as possible and ensure the
process is being followed to deposit and reconcile the reserve for replacement account on a
monthly basis.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-003 (Significant Deficiency)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
Owners of insured and assisted multifamily housing projects are required by HUD administrative
guidelines to have a HUD approved Project Owner’s/Management Agent’s Certification for
housing projects managed by Administrators for extremely or very low-income persons (Form
9839-B).
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization did not have a HUD approved Form 9839-B from March 1,
2023 through December 31, 2023.
S3800-032: Cause
The Organization did not submit a request for approval.
S3800-033: Effect or Potential Effect
Management has not been approved to manage the Project for this period.
S3800-035: Auditor Non-Compliance Code:
J – Unauthorized management fees
S3800-040: Questioned Costs
$20,106
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization is required to have all of its necessary forms and licenses current and up to
date.
S3800-080: Recommendation
The Organization should file HUD Form 9839-B immediately. Additionally, the Organization
should ask HUD to retrospectively approve Form 9839-B effective March 1, 2023.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-004 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
Per the Consolidated Audit Guide for Audits of HUD Programs (Handbook 2000.4 REV-2; the
HUD audit guide), the amount of tenant security deposits shall at all times equal or exceed the
aggregate of all outstanding obligations under the security deposit account.
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization failed to maintain an amount equal to or greater of the tenant
security deposit account compared to all obligations under that account.
S3800-032: Cause
The Organization failed to review and ensure the amount on deposit was at least equal to the
outstanding obligations under the security deposit account throughout the reporting period.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with requirements in the HUD audit guide related to
tenant security deposits.
S3800-035: Auditor Non-Compliance Code:
M – Security deposits
S3800-040: Questioned Costs
None
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization did not reconcile the security deposit account throughout the reporting period
to ensure the amount on deposit was at least equal to the outstanding obligations under the
security deposit account. At all times, the liability account was greater than the asset account.
S3800-080: Recommendation
The Organization should implement policies and procedures to ensure that accounting records
are kept accurate and complete as per the requirement of the HUD audit guide related to tenant
security deposits and a responsible official should ensure the process is being followed on a
monthly basis.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-001 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Financial Statement and Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
The regulatory agreement requires that the Organization’s books and records are maintained in
accordance with HUD guidelines and generally accepted accounting principles.
S3800-030: Statement of Condition
Several misstatements were identified by the auditor in the unaudited financial statements and
accounts of the Organization.
S3800-032: Cause
The Organization lacks adequate internal controls to ensure that books and records are kept
accurately and completely.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with the regulatory agreement requirement to maintain
accurate and complete books and accounts.
S3800-035: Auditor Non-Compliance Code
S – Internal Control Deficiencies
S3800-040: Questioned Costs
None
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
On the general ledger, various accounts such as rent, vacancies, and escrow accounts did not
tie to supporting documentation. The Organization did not capitalize the fixed assets as per the
capitalization policy. The cash balance in general ledger did not tie the bank reconciliation
statement.
S3800-080: Recommendation
The Auditor recommends the Organization follows their policies and procedures to ensure that
accounting records are kept accurate and complete, and a responsible official should review and
sign off on the monthly financial statements.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-002 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
2022-002
S3800-020: Criteria
HUD Form-9250, Funds Authorizations, requires the Organization to deposit $1,842 into the
replacement reserve account on a monthly basis.
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization failed to make the required monthly deposits into the reserve
for replacement account for all twelve months. The Organization deposited monthly $1,796 as
opposed to the approved $1,842.
S3800-032: Cause
The Organization deposited the prior required monthly amount into the reserve for replacement
account.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with the regulatory agreement to make required monthly
deposits into the reserve for replacement account.
S3800-035: Auditor Non-Compliance Code:
N – Reserve for replacements deposits
S3800-040: Questioned Costs
$544
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization deposited $21,560 onto the reserve for replacement account during the year
ended December 31, 2023. The Organization was required to deposit $22,104 for the year. Per
Missouri Housing Development Commission (HUD’s designee), the Organization was required to
increase the monthly deposit to the reserve for replacement account from $1,796 to $1,842
effective June 1, 2019. The $544 questioned costs only accounts for the current fiscal year
underfunding.
S3800-080: Recommendation
The Organization should deposit the shortfall of $544 into the reserve for replacement account,
as well as the shortfall for 2019, 2020, 2021 and 2022, as soon as possible and ensure the
process is being followed to deposit and reconcile the reserve for replacement account on a
monthly basis.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-003 (Significant Deficiency)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
Owners of insured and assisted multifamily housing projects are required by HUD administrative
guidelines to have a HUD approved Project Owner’s/Management Agent’s Certification for
housing projects managed by Administrators for extremely or very low-income persons (Form
9839-B).
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization did not have a HUD approved Form 9839-B from March 1,
2023 through December 31, 2023.
S3800-032: Cause
The Organization did not submit a request for approval.
S3800-033: Effect or Potential Effect
Management has not been approved to manage the Project for this period.
S3800-035: Auditor Non-Compliance Code:
J – Unauthorized management fees
S3800-040: Questioned Costs
$20,106
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization is required to have all of its necessary forms and licenses current and up to
date.
S3800-080: Recommendation
The Organization should file HUD Form 9839-B immediately. Additionally, the Organization
should ask HUD to retrospectively approve Form 9839-B effective March 1, 2023.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan
S3800-010: Finding Reference Number
2023-004 (Material Weakness)
S3800-011: Program Information
Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental
Housing (Section 207/223(F))
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.155
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Finding: N – Special Tests and Provisions
S3800-015: Type of Finding
Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
N/A
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
N/A
S3800-020: Criteria
Per the Consolidated Audit Guide for Audits of HUD Programs (Handbook 2000.4 REV-2; the
HUD audit guide), the amount of tenant security deposits shall at all times equal or exceed the
aggregate of all outstanding obligations under the security deposit account.
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended December 31, 2023 federal award
program, we noted the Organization failed to maintain an amount equal to or greater of the tenant
security deposit account compared to all obligations under that account.
S3800-032: Cause
The Organization failed to review and ensure the amount on deposit was at least equal to the
outstanding obligations under the security deposit account throughout the reporting period.
S3800-033: Effect or Potential Effect
The Organization was not in compliance with requirements in the HUD audit guide related to
tenant security deposits.
S3800-035: Auditor Non-Compliance Code:
M – Security deposits
S3800-040: Questioned Costs
None
S3800-045: Reporting Views of Responsible Officials
Management agrees with the finding.
S3800-050: Context
The Organization did not reconcile the security deposit account throughout the reporting period
to ensure the amount on deposit was at least equal to the outstanding obligations under the
security deposit account. At all times, the liability account was greater than the asset account.
S3800-080: Recommendation
The Organization should implement policies and procedures to ensure that accounting records
are kept accurate and complete as per the requirement of the HUD audit guide related to tenant
security deposits and a responsible official should ensure the process is being followed on a
monthly basis.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and
Recommendations
Auditee agreed with our recommendation.
S3800-130: Response Indicator
Agree
S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response
See Corrective Action Plan