FAC Explorer

Audit 31347

FY End
2022-06-30
Total Expended
$2.74M
Findings
4
Programs
6
Organization: Minot Vocational Adjustment Workshop, Inc. Dba: Kalix (ND)
Year: 2022 Accepted: 2022-10-20
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
32245 2022-001 Significant Deficiency - E
32246 2022-002 Significant Deficiency - E
608687 2022-001 Significant Deficiency - E
608688 2022-002 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.103 Interest Reduction Payments_rental and Cooperative Housing for Lower Income Families $1.69M Yes 2
10.415 Rural Rental Housing Loans $679,655 - 0
14.317 Section 8 Housing Assistance Payments Program Special Allocations (recovery Act Funded) $228,650 - 0
93.498 Provider Relief Funds $94,645 - 0
10.427 Rural Rental Assistance Payments $39,047 - 0
93.791 Money Follows the Person Rebalancing (qsp Expansion Grant) $10,511 - 0

Contacts

Name Title Type
PKHUTQ6QJNS7 Borgi Beeler Auditee
7018521014 Mindy Piatz Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (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 are not allowable or limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Minot Vocational Adjustment Workshop, Inc., DBA: Kalix has not elected to use the 10-percent de minimis cost rate as allowed under the Uniform Guidance. INTEREST REDUCTION PAYMENTS_RENTAL AND COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES (14.103) - Balances outstanding at the end of the audit period were 1610959. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 673313.
Title: EMPLOYER IDENTIFICATION NUMBERS Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (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 are not allowable or limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Minot Vocational Adjustment Workshop, Inc., DBA: Kalix has not elected to use the 10-percent de minimis cost rate as allowed under the Uniform Guidance. The accompanying schedule includes the activities of Minot Vocational Adjustment Workshop, Inc., DBA: Kalix, EIN #45-0313122 and MVW Housing, LLC EIN #45-4889754.
Title: FEDERAL PORTION OF GOVERNMENT AGENCIES REVENUE AND GRANT INCOME Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (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 are not allowable or limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Minot Vocational Adjustment Workshop, Inc., DBA: Kalix has not elected to use the 10-percent de minimis cost rate as allowed under the Uniform Guidance. Minot Vocational Adjustment Workshop, Inc., DBA: Kalix does not distinguish between federaland non-federal revenue on the combined statement of activities and changes in net assets.Revenue from multiple sources is consolidated for financial statement presentation. Thecalculation of the federal amounts of funding for proper presentation in the Schedule ofExpenditures of Federal Awards (SEFA) are as follows:Department of HUD tenant rental assistance $ 228,650USDA tenant rental assistance 39,047Federal portion of government agencies revenue 267,697Non-federal portion of government agencies revenue 22,167,786Total government agencies revenue $ 22,435,483Grant Income:CARES Act Provider Relief Funds $ 94,645QSP Expansion Grant 10,511Federal portion of grant income 105,156Non-federal portions 72,874Total grant revenue $ 178,030
Title: RECONCILIATION OF SEFA SCHEDULE TO THE FINANCIAL STATEMENTS Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (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 are not allowable or limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Minot Vocational Adjustment Workshop, Inc., DBA: Kalix has not elected to use the 10-percent de minimis cost rate as allowed under the Uniform Guidance. The following schedule ties to the federal awards as stated on the SEFA schedule to thecombined financial statements:Balance of HUD mortgage loan as statedin SEFA footnote 4 $ 1,690,969Balance of Rural Rental Housing loan asstated in SEFA footnote 4 679,655Federal portion of government agencies revenueas stated in SEFA footnote 6 267,697Federal portion of grant income as noted in SEFAfootnote 6 105,156Total federal awards as stated on the SEFA schedule $ 2,743,477

Finding Details

Finding 2022-001
2022-001 ? US Department of Housing and Urban Development ? Rental and Cooperative Housing for Lower Income Families (14.103) Criteria: An appropriate system of internal controls requires that Minot Vocational Adjustment Workshop, Inc., DBA: Kalix comply with the requirements of the Rental and Cooperative Housing for Lower Income Families compliance supplement and maintain a completed and signed housing application for each tenant. Condition/Context: During our single audit testing of AL 14.103, Rental and Cooperative Housing for Lower Income Families, it was noted there was not a copy of a tenant?s signed and completed housing application in one of the eight tenant files tested. Cause: The Organization?s internal controls have not been designed to monitor its compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families compliance supplement. Questioned Costs: There were no questioned costs associated with this finding. Effect: The Organization did not retain a copy of the tenant?s signed and completed housing application and failed to detect they were not in compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families program. Recommendation: We recommend establishing a control to ensure that all required documents are obtained and filed accordingly. Views of Responsible Officials and Planned Corrective Actions: We agree with this finding. See corrective action plan item 2022-001. Indication of repeat finding: This is not a repeat finding.
Finding 2022-002
2022-002 ? US Department of Housing and Urban Development ? Rental and Cooperative Housing for Lower Income Families (14.103) Criteria: An appropriate system of internal controls requires that Minot Vocational Adjustment Workshop, Inc., DBA: Kalix comply with the requirements of the Rental and Cooperative Housing for Lower Income Families compliance supplement and complete and document an annual housing inspection. Condition/Context: During our single audit testing of AL 14.103, Rental and Cooperative Housing for Lower Income Families, it was noted there was no documentation of a complete annual housing inspection that took place during the current year. Cause: The Organization?s internal controls have not been designed to monitor its compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families compliance supplement. Questioned Costs: There were no questioned costs associated with this finding. Effect: The Organization did not document the completion of the annual housing inspections for tenants and failed to detect they were not in compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families program. Recommendation: We recommend establishing a control to ensure that all required documentation of housing inspections are completed and filed accordingly. Views of Responsible Officials and Planned Corrective Actions: We agree with this finding. See corrective action plan item 2022-002. Indication of repeat finding: This is not a repeat finding.
Finding 2022-001
2022-001 ? US Department of Housing and Urban Development ? Rental and Cooperative Housing for Lower Income Families (14.103) Criteria: An appropriate system of internal controls requires that Minot Vocational Adjustment Workshop, Inc., DBA: Kalix comply with the requirements of the Rental and Cooperative Housing for Lower Income Families compliance supplement and maintain a completed and signed housing application for each tenant. Condition/Context: During our single audit testing of AL 14.103, Rental and Cooperative Housing for Lower Income Families, it was noted there was not a copy of a tenant?s signed and completed housing application in one of the eight tenant files tested. Cause: The Organization?s internal controls have not been designed to monitor its compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families compliance supplement. Questioned Costs: There were no questioned costs associated with this finding. Effect: The Organization did not retain a copy of the tenant?s signed and completed housing application and failed to detect they were not in compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families program. Recommendation: We recommend establishing a control to ensure that all required documents are obtained and filed accordingly. Views of Responsible Officials and Planned Corrective Actions: We agree with this finding. See corrective action plan item 2022-001. Indication of repeat finding: This is not a repeat finding.
Finding 2022-002
2022-002 ? US Department of Housing and Urban Development ? Rental and Cooperative Housing for Lower Income Families (14.103) Criteria: An appropriate system of internal controls requires that Minot Vocational Adjustment Workshop, Inc., DBA: Kalix comply with the requirements of the Rental and Cooperative Housing for Lower Income Families compliance supplement and complete and document an annual housing inspection. Condition/Context: During our single audit testing of AL 14.103, Rental and Cooperative Housing for Lower Income Families, it was noted there was no documentation of a complete annual housing inspection that took place during the current year. Cause: The Organization?s internal controls have not been designed to monitor its compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families compliance supplement. Questioned Costs: There were no questioned costs associated with this finding. Effect: The Organization did not document the completion of the annual housing inspections for tenants and failed to detect they were not in compliance with this requirement of the Rental and Cooperative Housing for Lower Income Families program. Recommendation: We recommend establishing a control to ensure that all required documentation of housing inspections are completed and filed accordingly. Views of Responsible Officials and Planned Corrective Actions: We agree with this finding. See corrective action plan item 2022-002. Indication of repeat finding: This is not a repeat finding.