FAC Explorer

Audit 321023

FY End
2023-12-31
Total Expended
$826,627
Findings
2
Programs
7
Organization: Sunflower Diversified Services, Inc. (KS)
Year: 2023 Accepted: 2024-09-25
Auditor: Adamsbrown LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
498262 2023-001 Significant Deficiency - E
1074704 2023-001 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $340,907 Yes 1
20.509 Formula Grants for Rural Areas and Tribal Transit Program $245,161 - 0
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $68,502 - 0
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $60,621 - 0
84.181 Special Education-Grants for Infants and Families $52,089 - 0
93.778 Medical Assistance Program $40,472 - 0
93.575 Child Care and Development Block Grant $18,875 - 0

Contacts

Name Title Type
E3N9XMNU3G65 Shelby Zuniga Auditee
6207921321 Danielle Hollingshead Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are presented in accordance with generally accepted accounting principles. Such expenditures are recognized following the cost principles contained in the Uniform Guidance cost principles, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Auditee did not use the de minimis cost rate The accompanying schedule of expenditures of federal awards includes the federal grant activity of Sunflower Diversified Services, Inc. and Affiliate 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), Audits of States, Local Governments, and Non-Profit Organizations. Because the schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the net assets, changes in net assets, or cash flows of the Organization.
Title: U.S. Department of Housing and Urban Development Loan Program Accounting Policies: Expenditures reported on the schedule are presented in accordance with generally accepted accounting principles. Such expenditures are recognized following the cost principles contained in the Uniform Guidance cost principles, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Auditee did not use the de minimis cost rate Sunflower Diversified Services, Inc. and Affiliate, HUD Project No. 102-11035 has received a direct loan from the U.S. Department of Housing and Urban Development. January 01, 2023 loan balances are included in the federal expenditures presented in the schedule. Sunflower Diversified Services, Inc. and Affiliate, HUD Project No. 102-11035 received no additional loans during the year. The balance of the loan outstanding at December 31, 2023 consists of: SEE THE NOTES TO THE SEFA FOR TABLE

Finding Details

Finding 2023-001
2023-001 14.155 – Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Criteria or specific requirement To ensure that assisted tenants pay rents commensurate with their ability to pay, tenants must undergo annual recertification. They must also undergo an interim recertification when their family’s income cumulatively increases by $200 or more per month. Any changes should be input on the tenant’s HUD-50059 form, and, for interim recertifications, if the tenant complied with the reporting requirements, rent increases should be implemented after a 30 day advance notice period. Condition During testing, we identified that certain tenants had an improper amount of rent calculated and applied to their rental agreement or paid an incorrect amount. Context Of the three tenants tested, one tenant had an inaccurate amount listed on the Cash Value of Assets section of their HUD-50059 form, which, in turn, affected the amount of rent that they were required to pay. Another tenant underwent an interim recertification, which noted that a rent increase was required, and notification was given to the tenant in May 2023. However, that increase was implemented retroactively to April 2023. Cause For the first situation noted above, the Cash Value of Assets calculated by the Organization only summed five of the six months’ bank statements provided for average, but the total was still divided by six months. For the second situation, the tenant had only recently moved in, and they had been in the process of applying for government benefits at the time of the move in. During the tenant application process, the tenant was notified that a rent increase would be required once the benefits went into effect. However, the official notice was not provided with 30 days advance notice prior to implementing the increase. Effect Two tenants had incorrect amounts applied to their rental agreements. Recommendation Procedures should be reviewed to ensure that all tenants pay an accurate amount for their rental agreements. Views of responsible officials See corrective action plan.
Finding 2023-001
2023-001 14.155 – Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Criteria or specific requirement To ensure that assisted tenants pay rents commensurate with their ability to pay, tenants must undergo annual recertification. They must also undergo an interim recertification when their family’s income cumulatively increases by $200 or more per month. Any changes should be input on the tenant’s HUD-50059 form, and, for interim recertifications, if the tenant complied with the reporting requirements, rent increases should be implemented after a 30 day advance notice period. Condition During testing, we identified that certain tenants had an improper amount of rent calculated and applied to their rental agreement or paid an incorrect amount. Context Of the three tenants tested, one tenant had an inaccurate amount listed on the Cash Value of Assets section of their HUD-50059 form, which, in turn, affected the amount of rent that they were required to pay. Another tenant underwent an interim recertification, which noted that a rent increase was required, and notification was given to the tenant in May 2023. However, that increase was implemented retroactively to April 2023. Cause For the first situation noted above, the Cash Value of Assets calculated by the Organization only summed five of the six months’ bank statements provided for average, but the total was still divided by six months. For the second situation, the tenant had only recently moved in, and they had been in the process of applying for government benefits at the time of the move in. During the tenant application process, the tenant was notified that a rent increase would be required once the benefits went into effect. However, the official notice was not provided with 30 days advance notice prior to implementing the increase. Effect Two tenants had incorrect amounts applied to their rental agreements. Recommendation Procedures should be reviewed to ensure that all tenants pay an accurate amount for their rental agreements. Views of responsible officials See corrective action plan.