FAC Explorer

Audit 311413

FY End
2023-09-30
Total Expended
$5.65M
Findings
2
Programs
1
Organization: Primrose Apartments, Inc. (PA)
Year: 2023 Accepted: 2024-07-01
Auditor: Black Bashor & Porsch LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
405782 2023-001 Significant Deficiency - N
982224 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $84,757 Yes 0

Contacts

Name Title Type
HPDGL935X2R6 Wilma Torres Auditee
7243426222 Norbert F. Dietrich, Jr. CPA Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3 - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of Primrose Apartments, Inc., HUD Project No. 033‑EE147, under programs of the federal government for the year ended September 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 select portion of the operations of Primrose Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of Primrose Apartments, Inc. 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. De Minimis Rate Used: N Rate Explanation: Primrose Apartments, Inc. has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. HUD has made a Section 202 Capital Advance to Primrose Apartments, Inc., for the purpose of funding the major portion of the cost of the apartment complex. The total amount of the advance is $ 5,567,400 at September 30, 2023. No interest or repayment of the advance is required as long as the Organization operates the apartment complex for very low-income elderly persons for not less than 40 years from April 22, 2014. Until April 22, 2054, the Section 202 Capital Advance will continue to be reported on the Schedule as a major program for the full amount of the advance.

Finding Details

Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Supportive Housing for the Elderly Section 202 Assistance Listing Number: 14.157 Award Period: Year Ended September 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Failure to make all required reserve for replacement deposits. Condition: The Organization failed to timely make all of its required deposits to its reserve for replacement account during the year ended September 30, 2023. In accordance with the Organization's regulatory agreement, the Organization is required to make all deposits on a monthly basis. Cause: The Organization failed to make the December 2022 reserve for replacement required deposit in a timely manner (amount was subsequently deposited in January 2023). In addition, the reserve for replacement required deposits for March 2023 to September 2023 were not made prior to September 2023. Effect: All required monthly deposits were not made to the reserve for replacement account in accordance with the Organization's regulatory agreement with HUD. Questioned costs: $ 13,712 Context: Two required reserve for replacement deposits were not made in a timely manner. Recommendation: The Organization should establish procedures to ensure all required reserve for replacement amounts are deposited in a timely fashion. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The Organization has made a corrective deposit to the reserve for replacement for the month of December 2022. The Organization will make a catch-up deposit to the reserve for replacement account for all of the monthly deposits previously not made.
Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Supportive Housing for the Elderly Section 202 Assistance Listing Number: 14.157 Award Period: Year Ended September 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Failure to make all required reserve for replacement deposits. Condition: The Organization failed to timely make all of its required deposits to its reserve for replacement account during the year ended September 30, 2023. In accordance with the Organization's regulatory agreement, the Organization is required to make all deposits on a monthly basis. Cause: The Organization failed to make the December 2022 reserve for replacement required deposit in a timely manner (amount was subsequently deposited in January 2023). In addition, the reserve for replacement required deposits for March 2023 to September 2023 were not made prior to September 2023. Effect: All required monthly deposits were not made to the reserve for replacement account in accordance with the Organization's regulatory agreement with HUD. Questioned costs: $ 13,712 Context: Two required reserve for replacement deposits were not made in a timely manner. Recommendation: The Organization should establish procedures to ensure all required reserve for replacement amounts are deposited in a timely fashion. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The Organization has made a corrective deposit to the reserve for replacement for the month of December 2022. The Organization will make a catch-up deposit to the reserve for replacement account for all of the monthly deposits previously not made.