Audit 322299

FY End

2024-06-30

Total Expended

$1.25M

Findings

4

Programs

1

Organization: Shenandoah Haven, Inc. (TN)

Year: 2024 Accepted: 2024-09-30

Auditor: Johnson Hickey & Murchison PC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
499442	2024-001	Significant Deficiency	Yes	A
499443	2024-002	-	Yes	N
1075884	2024-001	Significant Deficiency	Yes	A
1075885	2024-002	-	Yes	N

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$1.25M	Yes	2

Contacts

Name	Title	Type
QCBEPAJSGKF4	Myra Walker	Auditee
9314324111	Andrew Grimes	Auditor
No contacts on file

Notes to SEFA

Title: NOTE A - Basis of presentation Accounting Policies: Expenditures reported on 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 reimbursement. Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal award activity of Shenandoah Haven, Inc., HUD Project No. 086-HD031, and is presented on the accrual basis of accounting. 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 Shenandoah Haven, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Shenandoah Haven, Inc.

Title: NOTE B - Summary of significant accounting policies Accounting Policies: Expenditures reported on 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 reimbursement. Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on 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 reimbursement. Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Title: NOTE C - U.S. Department of Housing and Urban Development Loan Program Accounting Policies: Expenditures reported on 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 reimbursement. Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Shenandoah Haven, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Shenandoah Haven, Inc. has received a U.S. Department of Housing and Urban Development capital advance under Section 811 of the National Housing Act. The balance at the beginning of the year is included in the federal expenditures presented in the Schedule. Shenandoah Haven, Inc. received no additional funds during the year.

Finding Details

Finding 2024-001

Finding 2024-001 Information of federal program Section 811 Supportive Housing for Persons with Disabilities Federal Assistance Listing Number 14.181. Questioned costs $0 Criteria Operating costs paid for services not provided is considered an unallowable cost. Condition Our consideration of internal control disclosed that the management company incorrectly approved a second invoice for services rendered. Cause Bills were not correctly identified as previously paid before payment was authorized. Effect Disallowed costs were identified, although the amount identified did not meet the threshold for reporting as a questioned cost under the Uniform Guidance. Recommendation Management should review its controls over proper identification of costs associated with each Organization. Views of management Management concurs. Auditors’ summary of the auditee’s comments on the findings and recommendations Management will reevaluate controls around invoice cancellation in efforts to minimize potential error going forward.

Finding 2024-002

Finding 2024-002 Information on federal program Section 811 Supportive Housing for Persons with Disabilities Federal Assistance Listing Number 14.181. Questioned costs $0 Criteria The Organization is required to make deposits into an escrow account to fund tax and insurance payments for the fiscal year. Condition The Organization’s escrow cash account did not have adequate deposits as of June 30, 2024. Cause The Organization had inadequate cash on hand to fund the escrow account. Effect The Organization may not be able to pay for their taxes and insurance for the upcoming year. Recommendation Management should budget for monthly tax and insurance escrow deposits and request a rent increase to prevent future shortfalls in escrow cash. Views of Management Management concurs. Auditors’ summary of the auditee’s comments on the findings and recommendations Management will request a rent increase and make deposits to the escrow account sufficient to cover future tax and insurance costs.

Finding 2024-001

Finding 2024-001 Information of federal program Section 811 Supportive Housing for Persons with Disabilities Federal Assistance Listing Number 14.181. Questioned costs $0 Criteria Operating costs paid for services not provided is considered an unallowable cost. Condition Our consideration of internal control disclosed that the management company incorrectly approved a second invoice for services rendered. Cause Bills were not correctly identified as previously paid before payment was authorized. Effect Disallowed costs were identified, although the amount identified did not meet the threshold for reporting as a questioned cost under the Uniform Guidance. Recommendation Management should review its controls over proper identification of costs associated with each Organization. Views of management Management concurs. Auditors’ summary of the auditee’s comments on the findings and recommendations Management will reevaluate controls around invoice cancellation in efforts to minimize potential error going forward.

Finding 2024-002

Finding 2024-002 Information on federal program Section 811 Supportive Housing for Persons with Disabilities Federal Assistance Listing Number 14.181. Questioned costs $0 Criteria The Organization is required to make deposits into an escrow account to fund tax and insurance payments for the fiscal year. Condition The Organization’s escrow cash account did not have adequate deposits as of June 30, 2024. Cause The Organization had inadequate cash on hand to fund the escrow account. Effect The Organization may not be able to pay for their taxes and insurance for the upcoming year. Recommendation Management should budget for monthly tax and insurance escrow deposits and request a rent increase to prevent future shortfalls in escrow cash. Views of Management Management concurs. Auditors’ summary of the auditee’s comments on the findings and recommendations Management will request a rent increase and make deposits to the escrow account sufficient to cover future tax and insurance costs.