FAC Explorer

Audit 308973

FY End
2023-06-30
Total Expended
$876,383
Findings
4
Programs
1
Organization: South Fulton Homes, Inc. (GA)
Year: 2023 Accepted: 2024-06-17
Auditor: Blad & Hezlep LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
400928 2023-002 Significant Deficiency Yes E
400929 2023-003 Significant Deficiency - P
977370 2023-002 Significant Deficiency Yes E
977371 2023-003 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $44,683 Yes 0

Contacts

Name Title Type
LR69YKXU3336 Cristy Campbell Auditee
4705756513 Adam Hezlep Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of South Fulton Homes, Inc. HUD Project NO. 061-HD023-WDD under programs of the Federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Accounting Principles Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 6 to the financial statements. 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) summarizes the expenditures of South Fulton Homes, Inc. HUD Project NO. 061-HD023-WDD under programs of the Federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: Accounting Principles Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of South Fulton Homes, Inc. HUD Project NO. 061-HD023-WDD under programs of the Federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Accounting Principles Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 6 to the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 6 to the financial statements.

Finding Details

Finding 2023-002
2023-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provided signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
Finding 2023-003
2023-003 Clients Not Billed in Accordance with the Housing Owner's Certification and Application for Housing Assistance Payments Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that client rent is billed on a monthly basis in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Condition: During the audit we noted a significant deficiency in the internal controls related to billing procedures. It was noted that client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments on numerous occasions. During the audit process, the Organization noted billing issues, performed an internal analysis, and brought the issue to the attention of the auditor. As a result, the Organization recorded an adjusting journal entry increasing client rent revenue by $2,316 and created additional billings for client rent to correct the billing errors. Cause: The Organization has had significant difficulties related to training and competency of accounting staff. Additionally, review procedures implemented were not sufficient to identify and correct billing errors in a timely manner. Effect: Client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments, therefore revenue was understated and additional client billings were deemed necessary. Recommendation: We recommend that accounting staff responsible for client billing is provided sufficient training and oversight. Additionally, we recommend that monthly billing of client rent is reviewed and reconciled in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Auditee Response: We concur with the finding and have begun implementing the recommendations.
Finding 2023-002
2023-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provided signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
Finding 2023-003
2023-003 Clients Not Billed in Accordance with the Housing Owner's Certification and Application for Housing Assistance Payments Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that client rent is billed on a monthly basis in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Condition: During the audit we noted a significant deficiency in the internal controls related to billing procedures. It was noted that client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments on numerous occasions. During the audit process, the Organization noted billing issues, performed an internal analysis, and brought the issue to the attention of the auditor. As a result, the Organization recorded an adjusting journal entry increasing client rent revenue by $2,316 and created additional billings for client rent to correct the billing errors. Cause: The Organization has had significant difficulties related to training and competency of accounting staff. Additionally, review procedures implemented were not sufficient to identify and correct billing errors in a timely manner. Effect: Client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments, therefore revenue was understated and additional client billings were deemed necessary. Recommendation: We recommend that accounting staff responsible for client billing is provided sufficient training and oversight. Additionally, we recommend that monthly billing of client rent is reviewed and reconciled in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Auditee Response: We concur with the finding and have begun implementing the recommendations.