FAC Explorer

Audit 318543

FY End
2023-12-31
Total Expended
$6.53M
Findings
4
Programs
2
Organization: Palmer Park Senior Housing, Inc. (MD)
Year: 2023 Accepted: 2024-09-04
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
485721 2023-001 Material Weakness - E
485722 2023-002 Material Weakness - E
1062163 2023-001 Material Weakness - E
1062164 2023-002 Material Weakness - E

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $6.39M Yes 2
14.239 Home Investment Partnerships Program $137,644 - 0

Contacts

Name Title Type
KFRLKTJ8USS1 Sarah O'Rielly Auditee
3014936000 Russell Phillips Auditor
No contacts on file

Notes to SEFA

Title: U.S. Department of Housing and Urban Development Capital Advance program Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Palmer Park Seniors Housing, Inc., HUD Project No.: 000-EE056, under programs of the federal government for the year ended December 31, 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 selected portion of the operations of Palmer Park Seniors Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Palmer Park Seniors Housing, Inc. For the year ended December 31, 2023, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and 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: Palmer Park Seniors Housing, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The balance shown on the schedule of expenditures of federal awards relating to the capital advance consists of $6,024,500 expended in prior years. Section 202 capital advances need not be repaid as long as the owner continues to make the housing available to the low-income elderly for at least 40 years.
Title: HOME Investment Partnerships Program (HOME) Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Palmer Park Seniors Housing, Inc., HUD Project No.: 000-EE056, under programs of the federal government for the year ended December 31, 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 selected portion of the operations of Palmer Park Seniors Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Palmer Park Seniors Housing, Inc. For the year ended December 31, 2023, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and 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: Palmer Park Seniors Housing, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Palmer Park Seniors Housing, Inc. has received a Prince George's County, Maryland loan under the HOME Investment Partnership Program for $200,000. The loan balance outstanding at the beginning of the period is included in the federal expenditures presented in the Schedule. See Notes to the SEFA for table.

Finding Details

Finding 2023-001
Criteria - Eligibility Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with out lease file review, we noted the following deficiencies: 2 out of 8 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. 1 out of 8 tenants tested did not have the accurate amount of adjusted annual income reported on HUD Form 50059. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and have the EIV binder available. They have also set calendar reminders to make sure that EIV reports are pulled in a timely manner. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2023-002
Criteria - Eligibility Management is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Condition During the procedures applied to a sample of eight tenant lease files; we noted the following instances of noncompliance with HUD regulations regarding dissemination of EIV information. One instance where EIV information was provided in electronic format to the independent public accountant was noted. Cause Management company employees failed to follow the policies and procedures which have been established for the proper dissemination of EIV information in accordance with guidelines specified by HUD. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned Costs: N/A Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and policies and procedures regarding the handling of EIV reports have been reviewed with the team so that they will remain in compliance, so the EIV reports do not leave the property. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2023-001
Criteria - Eligibility Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with out lease file review, we noted the following deficiencies: 2 out of 8 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. 1 out of 8 tenants tested did not have the accurate amount of adjusted annual income reported on HUD Form 50059. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and have the EIV binder available. They have also set calendar reminders to make sure that EIV reports are pulled in a timely manner. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2023-002
Criteria - Eligibility Management is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Condition During the procedures applied to a sample of eight tenant lease files; we noted the following instances of noncompliance with HUD regulations regarding dissemination of EIV information. One instance where EIV information was provided in electronic format to the independent public accountant was noted. Cause Management company employees failed to follow the policies and procedures which have been established for the proper dissemination of EIV information in accordance with guidelines specified by HUD. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned Costs: N/A Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and policies and procedures regarding the handling of EIV reports have been reviewed with the team so that they will remain in compliance, so the EIV reports do not leave the property. The regional manager will be following up with the onsite staff to make sure they are in compliance.