Audit 317383

FY End
2024-05-31
Total Expended
$10.33M
Findings
2
Programs
3
Organization: Houston Heights Towers (TX)
Year: 2024 Accepted: 2024-08-16

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
481312 2024-001 - - N
1057754 2024-001 - - N

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $6.50M Yes 1
14.218 Community Development Block Grants/entitlement Grants $3.50M Yes 0
14.195 Section 8 Housing Assistance Payments Program $330,947 Yes 0

Contacts

Name Title Type
D1YXYTMXD9G5 Linda G Holder Auditee
7135629470 Nancy MacK Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project 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 includes the federal grant activity of Houston Heights Tower, HUD No. 114-44098. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CRT) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Houston Heights Tower, it is not intended to and does not present the financial position, changes in net assets or cash flows of Houston Heights Tower.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported in 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 reimbursements.
Title: GRANTS Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has received grants under the Community Development Block Grant and HOME Improvement Partnership Grant programs. The grant balances at the beginning of the year are included in the federal expenditures presented in the schedule. The Project received no additional grant funds during the year. The grants are reported as net assets with donor restrictions in the statement of financial position.
Title: INDIRECT COST RATE Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Schedule reference number 2024-001 Title and AL Number of Federal Program: Home Improvement Partnership Grant (AL 14.239) Type of finding: Federal Award Resolution Status: In process. Population size: N/A Sample size: N/A Repeat finding: No. Criteria: The regulatory agreement stipulates that all withdrawals exceeding $2,500 from the Reserve for Replacement Account need prior written consent of the lender. Statement of Condition: A withdrawal of $37,000 for emergency improvements was made from the Reserve for Replacement account without prior approval from the lender. Cause: Management tried to get approval for the withdrawal from HUD, not realizing that the new regulatory agreement required them to get approval from the lender. Effect or Potential Effect: The Project is not in conformity with the terms of the regulatory agreement. Auditor Non-Compliance Code: N. Questioned costs: N/A. Reporting views of responsible officials: Management thought the approval was to be requested from HUD, as had been the case with the earlier regulatory agreement. Contract Number: 114-44098. Context: The error was noticed at the time of performing the audit. Recommendation: Management should obtain prior consent from lender for all withdrawals from the Reserve for Replacement exceeding $2,500. Auditors' summary of auditee's comment: They are in agreement. Proposed completion date: July 1, 2024. Response: Management agrees with the finding and on July 1, 2024, has obtained retroactive approval from the lender for the withdrawal of $37,000.
Schedule reference number 2024-001 Title and AL Number of Federal Program: Home Improvement Partnership Grant (AL 14.239) Type of finding: Federal Award Resolution Status: In process. Population size: N/A Sample size: N/A Repeat finding: No. Criteria: The regulatory agreement stipulates that all withdrawals exceeding $2,500 from the Reserve for Replacement Account need prior written consent of the lender. Statement of Condition: A withdrawal of $37,000 for emergency improvements was made from the Reserve for Replacement account without prior approval from the lender. Cause: Management tried to get approval for the withdrawal from HUD, not realizing that the new regulatory agreement required them to get approval from the lender. Effect or Potential Effect: The Project is not in conformity with the terms of the regulatory agreement. Auditor Non-Compliance Code: N. Questioned costs: N/A. Reporting views of responsible officials: Management thought the approval was to be requested from HUD, as had been the case with the earlier regulatory agreement. Contract Number: 114-44098. Context: The error was noticed at the time of performing the audit. Recommendation: Management should obtain prior consent from lender for all withdrawals from the Reserve for Replacement exceeding $2,500. Auditors' summary of auditee's comment: They are in agreement. Proposed completion date: July 1, 2024. Response: Management agrees with the finding and on July 1, 2024, has obtained retroactive approval from the lender for the withdrawal of $37,000.