Audit 315741

FY End

2024-03-31

Total Expended

$1.32M

Findings

2

Programs

2

Organization: Froh Manor Apartments (MI)

Year: 2024 Accepted: 2024-07-23

Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
479211	2024-001	Significant Deficiency	-	N
1055653	2024-001	Significant Deficiency	-	N

ALN	Program	Spent	Major	Findings
14.155	Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects	$1.11M	Yes	1
14.195	Section 8 Housing Assistance Payments Program	$210,486	-	0

Contacts

Name	Title	Type
TMELL7EXCEJ9	Marcus Gauthier	Auditee
2696517841	Laurie Horvath	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, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not 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 Froh Manor Apartments (the Corporation) under programs of the federal government for the year ended March 31, 2024. The information in this schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform AdministrativeRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Corporation.

Title: Loan Programs Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Corporation has an outstanding loan balance of $1,081,194 at March 31, 2024 with continuing compliance requirements.

Finding Details

Finding 2024-001

Statement of Condition: The Corporation did not have adequate and effective controls over compliance relating to special tests and provisions requirements. The Corporation did not make the required deposit of surplus cash in the amount of $9,507 into the residual receipts account within the time frame established by the U.S. Department of Housing and Urban Development (HUD). Criteria: Uniform Guidance states that controls should be implemented to ensure the Corporation is in compliance with special tests and provisions. As stated in the regulatory agreement, HUD requires the Corporation to deposit surplus cash into the residual receipts account within 90 days of fiscal year-end. Questioned Costs: No questioned costs were identified. Context: The required surplus cash deposit, which is calculated on an annual basis, was not made in the HUD required time frame. Cause: Management has indicated they overlooked the due date of the required deposit. Effect: The Corporation was not in compliance with the HUD requirement to deposit surplus cash into the residual receipts account within 90 days of fiscal year end. The deposit was made in April 2024. Recommendation: We recommend management review their processes and controls surrounding the surplus cash deposit into the residual receipts account. Management's Response: Management agrees with the finding and will put processes and controls in place to verify timely deposit in the future.

Finding 2024-001

Statement of Condition: The Corporation did not have adequate and effective controls over compliance relating to special tests and provisions requirements. The Corporation did not make the required deposit of surplus cash in the amount of $9,507 into the residual receipts account within the time frame established by the U.S. Department of Housing and Urban Development (HUD). Criteria: Uniform Guidance states that controls should be implemented to ensure the Corporation is in compliance with special tests and provisions. As stated in the regulatory agreement, HUD requires the Corporation to deposit surplus cash into the residual receipts account within 90 days of fiscal year-end. Questioned Costs: No questioned costs were identified. Context: The required surplus cash deposit, which is calculated on an annual basis, was not made in the HUD required time frame. Cause: Management has indicated they overlooked the due date of the required deposit. Effect: The Corporation was not in compliance with the HUD requirement to deposit surplus cash into the residual receipts account within 90 days of fiscal year end. The deposit was made in April 2024. Recommendation: We recommend management review their processes and controls surrounding the surplus cash deposit into the residual receipts account. Management's Response: Management agrees with the finding and will put processes and controls in place to verify timely deposit in the future.