Audit 321895

FY End

2023-12-31

Total Expended

$18.62M

Findings

4

Programs

1

Organization: Regent at Apple Valley, LLC Dba: the Seasons at Apple Valley (MN)

Year: 2023 Accepted: 2024-09-27

Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
499110	2023-001	Significant Deficiency	Yes	P
499111	2023-002	Significant Deficiency	-	N
1075552	2023-001	Significant Deficiency	Yes	P
1075553	2023-002	Significant Deficiency	-	N

ALN	Program	Spent	Major	Findings
14.129	Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities	$18.62M	Yes	2

Contacts

Name	Title	Type
GMYQLML5MFD3	Shelley Kendrick	Auditee
6517664300	Chris Steinhoff	Auditor
No contacts on file

Notes to SEFA

Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Project 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 2 CFR 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 the Project, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Project. 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Section 232 HUD-Insured Mortgage had an outstanding balance of $18,235,328 at December 31, 2023. De Minimis Rate Used: Y Rate Explanation: The Project has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2023-001

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD-Insured Mortgage Listing Number: 14.129 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Management is required to retain the HUD approved management agreement to ensure payments made are in accordance with HUD requirements. Condition: The Project does not have a HUD approved management agreement. Questioned costs: None Context: Management and HUD were unable to find the HUD approved agreement. Cause: Management did not retain the HUD approved management agreement. Effect: Due to the project not having a HUD approved management agreement, there is a possibility that management fees paid by the project are inaccurate. Repeat Finding: 2022-001 Recommendation: Recommend that management work with HUD to have the current management agreement approved. Views of responsible officials: There is no disagreement with the audit finding. Management will contact HUD to obtain an approved management agreement.

Finding 2023-002

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD-Insured Mortgage Listing Number: 14.129 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Management is required to maintain tenant security deposits in a separate bank account in an amount adequate to cover the security deposit liability. Condition: The security deposit bank account balance was not adequate to cover the security deposit liability. Questioned costs: None Context: The security deposit bank account had a balance of $61,837 at December 31, 2023 which was less than the related security deposit liability which was $116,761. Cause: The security deposit account was not adequately funded. Effect: The security deposit account is inadequate to cover the security deposit liability. Repeat Finding: N/A Recommendation: Recommend management fund the security deposit account in an amount that is adequate to cover the security deposit liability. Views of responsible officials: There is no disagreement with the audit finding. Management will fund the security deposit account in an amount adequate to cover the security deposit liability.

Finding 2023-001

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD-Insured Mortgage Listing Number: 14.129 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Management is required to retain the HUD approved management agreement to ensure payments made are in accordance with HUD requirements. Condition: The Project does not have a HUD approved management agreement. Questioned costs: None Context: Management and HUD were unable to find the HUD approved agreement. Cause: Management did not retain the HUD approved management agreement. Effect: Due to the project not having a HUD approved management agreement, there is a possibility that management fees paid by the project are inaccurate. Repeat Finding: 2022-001 Recommendation: Recommend that management work with HUD to have the current management agreement approved. Views of responsible officials: There is no disagreement with the audit finding. Management will contact HUD to obtain an approved management agreement.

Finding 2023-002

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD-Insured Mortgage Listing Number: 14.129 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Management is required to maintain tenant security deposits in a separate bank account in an amount adequate to cover the security deposit liability. Condition: The security deposit bank account balance was not adequate to cover the security deposit liability. Questioned costs: None Context: The security deposit bank account had a balance of $61,837 at December 31, 2023 which was less than the related security deposit liability which was $116,761. Cause: The security deposit account was not adequately funded. Effect: The security deposit account is inadequate to cover the security deposit liability. Repeat Finding: N/A Recommendation: Recommend management fund the security deposit account in an amount that is adequate to cover the security deposit liability. Views of responsible officials: There is no disagreement with the audit finding. Management will fund the security deposit account in an amount adequate to cover the security deposit liability.