Audit 317325

FY End

2023-09-30

Total Expended

$2.71M

Findings

2

Programs

2

Organization: Ridgecrest at Richfield (VA)

Year: 2023 Accepted: 2024-08-15

Auditor: Forvis Mazars LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
481212	2023-001	Significant Deficiency	-	N
1057654	2023-001	Significant Deficiency	-	N

ALN	Program	Spent	Major	Findings
14.134	Mortgage Insurance_rental Housing	$2.13M	Yes	1
14.195	Section 8 Housing Assistance Payments Program	$582,409	-	0

Contacts

Name	Title	Type
CFZ6GJULYEH9	Mary Clements	Auditee
5404443669	Don McNeill	Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported in the SEFA 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. Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (SEFA) includes the federal grant activity of Ridgecrest at Richfield under the programs of the federal government for the year ended September 30, 2023. The information in this SEFA is presented in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards . Because the SEFA presents only a selected portion of the operations of Ridgecrest at Richfield, it is not intended to and does not present the financial position, changes in net assets or cash flows of Ridgecrest at Richfield.

Title: Summary of Significant Accounting Principles Accounting Policies: Expenditures reported in the SEFA 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. Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. Expenditures reported in the SEFA 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. Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance.

Title: Loans Outstanding Accounting Policies: Expenditures reported in the SEFA 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. Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: Ridgecrest at Richfield has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. Ridgecrest at Richfield had the following loan balances outstanding at September 30, 2023 for loans that the grantor/pass-through grantor has still imposed continuing compliance requirements. Loans outstanding at the beginning of the year and loans made during the year are included in the SEFA. The balance of loans outstanding at September 30, 2023 consist of:

Finding Details

Finding 2023-001

Criteria: The Regulatory Agreement for Multifamily Housing Projects dated May 20, 2008, states in section 2. (c), that the owners shall establish and maintain, in addition to the reserve fund for replacements, a residual receipts fund by depositing thereto, with the mortgagee, the residual receipts, as defined herein, within 60 days after the end of the semiannual or annual fiscal period within which such receipts are realized. Condition: During our testing of the surplus cash calculation and residual receipts account, we noticed the surplus cash computed as of the September 30, 2022 fiscal year was not deposited in the residual receipts fund account held by the mortgagee. Cause: During the fiscal year 2023, the majority of the Project’s sole member’s assets were sold to two other organizations. As such, several staff transferred to the new organization. The Project was left with only the current CFO and no accounting staff. Management did not have the appropriate controls or staff in place to ensure the surplus cash was deposited timely with the mortgagee. Effect: The Project did not deposit the surplus cash amount of $22,818 calculated as of September 30, 2022, with the mortgagee within 60 days of the fiscal year end. Questioned Costs: None noted. Recommendation: We recommend that management implement controls to review the calculation of surplus cash as soon as possible after the fiscal year end and forward any surplus cash computed to the mortgagee within 60 days of the fiscal year end. Management views and Corrective Action Plan: Management agrees with this finding. Please refer to the Corrective Action Plan.

Finding 2023-001

Criteria: The Regulatory Agreement for Multifamily Housing Projects dated May 20, 2008, states in section 2. (c), that the owners shall establish and maintain, in addition to the reserve fund for replacements, a residual receipts fund by depositing thereto, with the mortgagee, the residual receipts, as defined herein, within 60 days after the end of the semiannual or annual fiscal period within which such receipts are realized. Condition: During our testing of the surplus cash calculation and residual receipts account, we noticed the surplus cash computed as of the September 30, 2022 fiscal year was not deposited in the residual receipts fund account held by the mortgagee. Cause: During the fiscal year 2023, the majority of the Project’s sole member’s assets were sold to two other organizations. As such, several staff transferred to the new organization. The Project was left with only the current CFO and no accounting staff. Management did not have the appropriate controls or staff in place to ensure the surplus cash was deposited timely with the mortgagee. Effect: The Project did not deposit the surplus cash amount of $22,818 calculated as of September 30, 2022, with the mortgagee within 60 days of the fiscal year end. Questioned Costs: None noted. Recommendation: We recommend that management implement controls to review the calculation of surplus cash as soon as possible after the fiscal year end and forward any surplus cash computed to the mortgagee within 60 days of the fiscal year end. Management views and Corrective Action Plan: Management agrees with this finding. Please refer to the Corrective Action Plan.