FAC Explorer

Audit 308683

FY End
2023-06-30
Total Expended
$1.11M
Findings
12
Programs
1
Organization: Fairbanks Community Homes 176-Hd-021 (AK)
Year: 2023 Accepted: 2024-06-12
Auditor: Hutchings & Associates CPAS

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
400641 2023-002 Significant Deficiency Yes N
400642 2023-003 Significant Deficiency Yes N
400643 2023-004 Significant Deficiency Yes N
400644 2023-002 Significant Deficiency Yes N
400645 2023-003 Significant Deficiency Yes N
400646 2023-004 Significant Deficiency Yes N
977083 2023-002 Significant Deficiency Yes N
977084 2023-003 Significant Deficiency Yes N
977085 2023-004 Significant Deficiency Yes N
977086 2023-002 Significant Deficiency Yes N
977087 2023-003 Significant Deficiency Yes N
977088 2023-004 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $58,992 Yes 3

Contacts

Name Title Type
N9NQKNFJJSK6 Nadine Winters Auditee
9074517230 Rod Hutchings Auditor
No contacts on file

Notes to SEFA

Title: 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization does not allocate indirect costs and, therefore, has not elected to use the 10% 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 the Organization under programs of the federal government for the year ending June 30, 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Capital Advance 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization does not allocate indirect costs and, therefore, has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Capital Advance through Section 811 Supportive Housing for Persons with Disabilities program in the amount of $1,047,400. The advance is secured by the property, bears no interest, and is repayable only if the property does not remain available for low-income elderly persons as approved by HUD for at least forty years. The Capital Advance matures February 1, 2046, at which time the debt will be deemed to be paid and discharged. No new loan was issued during the year. The balance of the loan was $1,047,400 for the year ended June 30, 2023.
Title: Additional Audits 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization does not allocate indirect costs and, therefore, has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. HUD reserves the right to conduct additional audits of the Project's grant program for economy and efficiency and program results that may result in disallowed costs to the Project. However, management does not believe such audits would result in any disallowed costs that would be material to the Project's financial position at June 30, 2023.

Finding Details

Finding 2023-002
Failure to deposit Surplus Cash in the Residual Receipts Accounts Criteria: Pursuant to 24 CFR §891.400(e) "Use of project funds" any surplus cash following the expiration of the fiscal year shall be deposited in a residual receipts account within 60 days following the end of the fiscal year. Condition: The Organization failed to timely transfer the surplus cash to theresidual receipts account. Questioned Costs: Unknown. Context: Upon review of the residual receipts activity after year end the surplus cash was not transferred to the restricted residual receipts account in a timely manner. Effect: The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause: The Organization did not have controls in place to identify HUD's reporting requirements. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-003
Failure to Return Residual Receipts to HUD Criteria:Pursuant to the June 19, 2015 HUD issued memorandum, owners must remit funds from the residual receipts account in excess of $250 per unit to HUD. Condition: The Organization did not transfer project funds to the residual receipts accounts in a timely manner and did not return residual receipts in excess of $250 per unit. Questioned Costs: Unknown. Context:Management did not transfer the surplush cash to the residual receipts accounts or return residual receipts balances in excess of $250 per unit to HUD. Effect: The Organization is not in compliance with 24 CFR §891.400(e) and the June 19, 2015 HUD memorandum. Cause: The Organization did not have controls in place to identify the requirements of returning residual receipts to HUD in a timely manner. Recommendation: We recommend that management return the amounts over the retained balance level to HUD. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-004
Failure to submit REAC reports Criteria:According to the Capital Advance Program Regulatory Agreeement, the Organization is required to submit electronic unaudited annual financial statements which are certified by the owner within 90 days after the end of the fiscal year. Auditor certified electronic financial statements are required to be submitted no later than nine months after year end. Condition:Unaudited financial statements that were certified by the owner were not submitted to HUD within 90 days after the end of the fiscal year. Questioned Costs: Unknown. Context:Upon review of the REAC submission, the the owner submission and the auditor submission were completed after the required deadline. Effect:The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause:The Organization did not have controls in place to submit the owner financial statements and were not able to complete the audit in a timely manner to submit the financial statements before the deadline. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited and audited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-002
Failure to deposit Surplus Cash in the Residual Receipts Accounts Criteria: Pursuant to 24 CFR §891.400(e) "Use of project funds" any surplus cash following the expiration of the fiscal year shall be deposited in a residual receipts account within 60 days following the end of the fiscal year. Condition: The Organization failed to timely transfer the surplus cash to theresidual receipts account. Questioned Costs: Unknown. Context: Upon review of the residual receipts activity after year end the surplus cash was not transferred to the restricted residual receipts account in a timely manner. Effect: The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause: The Organization did not have controls in place to identify HUD's reporting requirements. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-003
Failure to Return Residual Receipts to HUD Criteria:Pursuant to the June 19, 2015 HUD issued memorandum, owners must remit funds from the residual receipts account in excess of $250 per unit to HUD. Condition: The Organization did not transfer project funds to the residual receipts accounts in a timely manner and did not return residual receipts in excess of $250 per unit. Questioned Costs: Unknown. Context:Management did not transfer the surplush cash to the residual receipts accounts or return residual receipts balances in excess of $250 per unit to HUD. Effect: The Organization is not in compliance with 24 CFR §891.400(e) and the June 19, 2015 HUD memorandum. Cause: The Organization did not have controls in place to identify the requirements of returning residual receipts to HUD in a timely manner. Recommendation: We recommend that management return the amounts over the retained balance level to HUD. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-004
Failure to submit REAC reports Criteria:According to the Capital Advance Program Regulatory Agreeement, the Organization is required to submit electronic unaudited annual financial statements which are certified by the owner within 90 days after the end of the fiscal year. Auditor certified electronic financial statements are required to be submitted no later than nine months after year end. Condition:Unaudited financial statements that were certified by the owner were not submitted to HUD within 90 days after the end of the fiscal year. Questioned Costs: Unknown. Context:Upon review of the REAC submission, the the owner submission and the auditor submission were completed after the required deadline. Effect:The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause:The Organization did not have controls in place to submit the owner financial statements and were not able to complete the audit in a timely manner to submit the financial statements before the deadline. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited and audited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-002
Failure to deposit Surplus Cash in the Residual Receipts Accounts Criteria: Pursuant to 24 CFR §891.400(e) "Use of project funds" any surplus cash following the expiration of the fiscal year shall be deposited in a residual receipts account within 60 days following the end of the fiscal year. Condition: The Organization failed to timely transfer the surplus cash to theresidual receipts account. Questioned Costs: Unknown. Context: Upon review of the residual receipts activity after year end the surplus cash was not transferred to the restricted residual receipts account in a timely manner. Effect: The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause: The Organization did not have controls in place to identify HUD's reporting requirements. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-003
Failure to Return Residual Receipts to HUD Criteria:Pursuant to the June 19, 2015 HUD issued memorandum, owners must remit funds from the residual receipts account in excess of $250 per unit to HUD. Condition: The Organization did not transfer project funds to the residual receipts accounts in a timely manner and did not return residual receipts in excess of $250 per unit. Questioned Costs: Unknown. Context:Management did not transfer the surplush cash to the residual receipts accounts or return residual receipts balances in excess of $250 per unit to HUD. Effect: The Organization is not in compliance with 24 CFR §891.400(e) and the June 19, 2015 HUD memorandum. Cause: The Organization did not have controls in place to identify the requirements of returning residual receipts to HUD in a timely manner. Recommendation: We recommend that management return the amounts over the retained balance level to HUD. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-004
Failure to submit REAC reports Criteria:According to the Capital Advance Program Regulatory Agreeement, the Organization is required to submit electronic unaudited annual financial statements which are certified by the owner within 90 days after the end of the fiscal year. Auditor certified electronic financial statements are required to be submitted no later than nine months after year end. Condition:Unaudited financial statements that were certified by the owner were not submitted to HUD within 90 days after the end of the fiscal year. Questioned Costs: Unknown. Context:Upon review of the REAC submission, the the owner submission and the auditor submission were completed after the required deadline. Effect:The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause:The Organization did not have controls in place to submit the owner financial statements and were not able to complete the audit in a timely manner to submit the financial statements before the deadline. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited and audited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-002
Failure to deposit Surplus Cash in the Residual Receipts Accounts Criteria: Pursuant to 24 CFR §891.400(e) "Use of project funds" any surplus cash following the expiration of the fiscal year shall be deposited in a residual receipts account within 60 days following the end of the fiscal year. Condition: The Organization failed to timely transfer the surplus cash to theresidual receipts account. Questioned Costs: Unknown. Context: Upon review of the residual receipts activity after year end the surplus cash was not transferred to the restricted residual receipts account in a timely manner. Effect: The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause: The Organization did not have controls in place to identify HUD's reporting requirements. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-003
Failure to Return Residual Receipts to HUD Criteria:Pursuant to the June 19, 2015 HUD issued memorandum, owners must remit funds from the residual receipts account in excess of $250 per unit to HUD. Condition: The Organization did not transfer project funds to the residual receipts accounts in a timely manner and did not return residual receipts in excess of $250 per unit. Questioned Costs: Unknown. Context:Management did not transfer the surplush cash to the residual receipts accounts or return residual receipts balances in excess of $250 per unit to HUD. Effect: The Organization is not in compliance with 24 CFR §891.400(e) and the June 19, 2015 HUD memorandum. Cause: The Organization did not have controls in place to identify the requirements of returning residual receipts to HUD in a timely manner. Recommendation: We recommend that management return the amounts over the retained balance level to HUD. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.
Finding 2023-004
Failure to submit REAC reports Criteria:According to the Capital Advance Program Regulatory Agreeement, the Organization is required to submit electronic unaudited annual financial statements which are certified by the owner within 90 days after the end of the fiscal year. Auditor certified electronic financial statements are required to be submitted no later than nine months after year end. Condition:Unaudited financial statements that were certified by the owner were not submitted to HUD within 90 days after the end of the fiscal year. Questioned Costs: Unknown. Context:Upon review of the REAC submission, the the owner submission and the auditor submission were completed after the required deadline. Effect:The Organization is not in compliance with the Capital Advance Program Regulatory Agreement and has been notified by HUD of the late filing. Cause:The Organization did not have controls in place to submit the owner financial statements and were not able to complete the audit in a timely manner to submit the financial statements before the deadline. Recommendation: The Organization should implement controls to ensure future compliance and timely reporting of the unaudited and audited financial statements. Identification of repeat finding: This is an ongoing finding. Management's Response: Management concurs with the finding. See Corrective Action Plan.