FAC Explorer

Audit 308354

FY End
2023-12-31
Total Expended
$1.91M
Findings
4
Programs
1
Organization: Asi - Jackson County, Inc. (MN)
Year: 2023 Accepted: 2024-06-07
Auditor: Platform CPAS LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
400236 2023-001 Material Weakness Yes N
400237 2023-002 Material Weakness Yes N
976678 2023-001 Material Weakness Yes N
976679 2023-002 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $1.91M Yes 2

Contacts

Name Title Type
RVM8KVZFKEG4 Chuck Reuter Auditee
6416457271 Misol Kim Auditor
No contacts on file

Notes to SEFA

Title: 1. BASIS OF PRESENTATION Accounting Policies: 2. SUMMARY OF SIGNIFICANT 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. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 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 (the “Schedule”) includes the federal award activity of ASI - Jackson County, Inc. (the “Company”) and is presented on the accrual basis of accounting. 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 (the “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: 3. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: 2. SUMMARY OF SIGNIFICANT 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. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Company has received a loan funded by programs of U.S. Department of Housing and Urban Development. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Such balance has been included as net assets in the financial statements of the Company as of December 31, 2023 since the likelihood of repayment is remote. The Company received no additional loans during the year ended December 31, 2023. The balance of the loan outstanding at December 31, 2023 is as follows: CFDA Number Program Name Outstanding Balance 14.181 Supportive Housing for Persons with Disabilities (Section 811) $ 1,843,500

Finding Details

Finding 2023-001
Type of Finding – Federal Award Finding Finding Resolution Status – Resolved Identification of Repeat Finding and Finding Reference Number – Finding Number 2022-001 - CFDA 14.181 - Supportive Housing for Persons with Disabilities (Section 811) Criteria or Specific Condition – The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition – Annual recertification of existing tenants were not completed in a timely manner for 13 out of 22 units during 2023. Cause – The annual recertification was not done in a timely manner due to lack of staffing at the property management company. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – Z – Eligibility Questioned Costs – None Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should complete the recertification process for the tenants in a timely manner. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Completion Date – December 31, 2023 Response – In February 2023, Cascade Management hired a compliance specialist and resumed the recertification processes. The late recertifications for 2023 were completed and processed for payment prior to December 31, 2023. The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.
Finding 2023-002
Type of Finding – Federal Award Finding Finding Resolution Status – In process Identification of Repeat Finding and Finding Reference Number – Finding Number 2022-002 - CFDA 14.181 - Supportive Housing for Persons with Disabilities (Section 811) Criteria or Specific Condition – The Regulatory Agreement requires the Company to make monthly deposits of $654 to the reserve for replacements. Statement of Condition – In addition to the five monthly deposits that were not made in 2022, the Project only made eleven (11) monthly deposits of $654 to the replacement reserve during 2023. As a result, the Project’s reserve for replacements was underfunded by $3,925 at December 31, 2023. Cause – The Project did not have sufficient cash flow to make the required deposits. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – N – Reserve for replacements deposits. Questioned Costs – $3,925 Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should deposit the reserve for replacement shortage of $3,925. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Completion Date – December 31, 2024 Response – Once the Project’s cash flow improves, the reserve for replacement deposits will be caught up and made monthly thereafter.
Finding 2023-001
Type of Finding – Federal Award Finding Finding Resolution Status – Resolved Identification of Repeat Finding and Finding Reference Number – Finding Number 2022-001 - CFDA 14.181 - Supportive Housing for Persons with Disabilities (Section 811) Criteria or Specific Condition – The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition – Annual recertification of existing tenants were not completed in a timely manner for 13 out of 22 units during 2023. Cause – The annual recertification was not done in a timely manner due to lack of staffing at the property management company. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – Z – Eligibility Questioned Costs – None Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should complete the recertification process for the tenants in a timely manner. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Completion Date – December 31, 2023 Response – In February 2023, Cascade Management hired a compliance specialist and resumed the recertification processes. The late recertifications for 2023 were completed and processed for payment prior to December 31, 2023. The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.
Finding 2023-002
Type of Finding – Federal Award Finding Finding Resolution Status – In process Identification of Repeat Finding and Finding Reference Number – Finding Number 2022-002 - CFDA 14.181 - Supportive Housing for Persons with Disabilities (Section 811) Criteria or Specific Condition – The Regulatory Agreement requires the Company to make monthly deposits of $654 to the reserve for replacements. Statement of Condition – In addition to the five monthly deposits that were not made in 2022, the Project only made eleven (11) monthly deposits of $654 to the replacement reserve during 2023. As a result, the Project’s reserve for replacements was underfunded by $3,925 at December 31, 2023. Cause – The Project did not have sufficient cash flow to make the required deposits. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – N – Reserve for replacements deposits. Questioned Costs – $3,925 Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should deposit the reserve for replacement shortage of $3,925. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Completion Date – December 31, 2024 Response – Once the Project’s cash flow improves, the reserve for replacement deposits will be caught up and made monthly thereafter.