FAC Explorer

Audit 322740

FY End
2024-06-30
Total Expended
$2.42M
Findings
4
Programs
3
Organization: Kanesville Heights, INC (IA)
Year: 2024 Accepted: 2024-09-30
Auditor: Donovan PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
499876 2024-001 Significant Deficiency - P
499877 2024-002 Significant Deficiency - P
1076318 2024-001 Significant Deficiency - P
1076319 2024-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $2.31M Yes 2
14.239 Home Investment Partnerships Program $54,700 - 0
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $52,258 - 0

Contacts

Name Title Type
JPFNLQUKVFN1 Adam Buckentine Auditee
7127963271 David Lemler Auditor
No contacts on file

Notes to SEFA

Title: Note 2 – Capital Advance and Loan Outstanding Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal granting activity of Kanesville Heights, Inc. HUD Project 074-EE038 (Kanesville) 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 (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: Kanesville elected to not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance for Federal Awards. Instead of electing a 10% de minimis indirect cost rate, Kanesville has a HUD-approved management agreement allowing a percent of defined gross revenues or per unit per month fee to cover administrative fees as set forth in the agreement. The accompanying schedule of expenditures of federal awards includes capital advance and loan balance outstanding at July 1, 2023 of $2,366,800. During the year ended June 30, 2024, principal payments of $0 were paid on the capital advance and loan. At June 30, 2024, the capital advance and loan balance outstanding is $2,366,800.

Finding Details

Finding 2024-001
Finding 2024-001 – Tenant Move Outs Title and CFDA Number of Federal Program: Section 202 - Capital Advance – 14.157. Type of Finding: Financial Statements and Federal Award. Finding Resolution Status: Completed. Information on Universe and Population Size: Population of seven tenant move out files. Sample Size Information: Three tenant move out files. Identification of Repeat Finding and Finding Reference Number: This is not applicable. Criteria: Three tenant move out files were selected using the haphazard method based on a population of seven tenants. Based on the selection, two of the three tenant files were missing various supporting documentation. Statement of Condition: Kanesville’s tenant move out files omitted required elements in accordance with the HUD handbook and PRAC contract. Cause: Management agent did not monitor tenant move out files and retain required information. Effect or Potential Effect: Due to a lack of documentation, inaccurate tenant move out information can be verified. Auditor Code: S – Internal Control Deficiency. Questioned Costs: $0. Reporting View of Responsible Officials: Management agent will review tenant move out files to ensure they are in compliance with HUD standards. This finding occurred when M3 was managing the property. Kanesville hired a new management agent that is familiar with HUD standards. Context: See effect above. Recommendation: Tenant move out files are being maintained by the new management agent to ensure compliance with HUD standards. Auditor Summary of the Auditees Comments on Findings and Recommendations: Document and maintain tenant move out files information in the future for inspection. Response Indicator: Agreed. Completion Date: August 16, 2024 Reporting Views of Responsible Officials / Corrective Action Plan / Management Agent Response: Management agent is currently documenting tenant move out files in compliance with the HUD handbook and PRAC contract.
Finding 2024-002
Finding 2024-002 – Disbursement Support Title and CFDA Number of Federal Program: Section 202 - Capital Advance – 14.157. Type of Finding: Financial Statements and Federal Award. Finding Resolution Status: Completed. Information on Universe and Population Size: All disbursements during the year ended June 30, 2024. Sample Size Information: 25 disbursements. Identification of Repeat Finding and Finding Reference Number: This is not applicable. Criteria: Twenty-five disbursements totaling $16,179 were selected for testing using the haphazard method. Based on the selection, four disbursements totaling $1,414 were missing supporting documentation. Statement of Condition: Kanesville’s disbursements omitted required support in accordance with the HUD handbook and PRAC contract. Cause: Management agent did not maintain documentation on disbursements. Effect or Potential Effect: Due to a lack of documentation, inaccurate financial reporting could occur. Auditor Code: S – Internal Control Deficiency. Questioned Costs: $0. Reporting View of Responsible Officials: Management agent should retain disbursement supporting documents in compliance with HUD standards. This finding occurred when M3 was managing the property. Kanesville hired a new management agent that is familiar with HUD standards. Context: See effect above. Recommendation: Disbursement support should be retained to ensure compliance with HUD standards. Auditor Summary of the Auditees Comments on Findings and Recommendations: Document and maintain disbursement supporting information in the future for inspection. Response Indicator: Agreed. Completion Date: August 16, 2024 Reporting Views of Responsible Officials / Corrective Action Plan / Management Agent Response: Management agent is currently retaining documentation concerning disbursements in compliance with the HUD handbook and PRAC contract.
Finding 2024-001
Finding 2024-001 – Tenant Move Outs Title and CFDA Number of Federal Program: Section 202 - Capital Advance – 14.157. Type of Finding: Financial Statements and Federal Award. Finding Resolution Status: Completed. Information on Universe and Population Size: Population of seven tenant move out files. Sample Size Information: Three tenant move out files. Identification of Repeat Finding and Finding Reference Number: This is not applicable. Criteria: Three tenant move out files were selected using the haphazard method based on a population of seven tenants. Based on the selection, two of the three tenant files were missing various supporting documentation. Statement of Condition: Kanesville’s tenant move out files omitted required elements in accordance with the HUD handbook and PRAC contract. Cause: Management agent did not monitor tenant move out files and retain required information. Effect or Potential Effect: Due to a lack of documentation, inaccurate tenant move out information can be verified. Auditor Code: S – Internal Control Deficiency. Questioned Costs: $0. Reporting View of Responsible Officials: Management agent will review tenant move out files to ensure they are in compliance with HUD standards. This finding occurred when M3 was managing the property. Kanesville hired a new management agent that is familiar with HUD standards. Context: See effect above. Recommendation: Tenant move out files are being maintained by the new management agent to ensure compliance with HUD standards. Auditor Summary of the Auditees Comments on Findings and Recommendations: Document and maintain tenant move out files information in the future for inspection. Response Indicator: Agreed. Completion Date: August 16, 2024 Reporting Views of Responsible Officials / Corrective Action Plan / Management Agent Response: Management agent is currently documenting tenant move out files in compliance with the HUD handbook and PRAC contract.
Finding 2024-002
Finding 2024-002 – Disbursement Support Title and CFDA Number of Federal Program: Section 202 - Capital Advance – 14.157. Type of Finding: Financial Statements and Federal Award. Finding Resolution Status: Completed. Information on Universe and Population Size: All disbursements during the year ended June 30, 2024. Sample Size Information: 25 disbursements. Identification of Repeat Finding and Finding Reference Number: This is not applicable. Criteria: Twenty-five disbursements totaling $16,179 were selected for testing using the haphazard method. Based on the selection, four disbursements totaling $1,414 were missing supporting documentation. Statement of Condition: Kanesville’s disbursements omitted required support in accordance with the HUD handbook and PRAC contract. Cause: Management agent did not maintain documentation on disbursements. Effect or Potential Effect: Due to a lack of documentation, inaccurate financial reporting could occur. Auditor Code: S – Internal Control Deficiency. Questioned Costs: $0. Reporting View of Responsible Officials: Management agent should retain disbursement supporting documents in compliance with HUD standards. This finding occurred when M3 was managing the property. Kanesville hired a new management agent that is familiar with HUD standards. Context: See effect above. Recommendation: Disbursement support should be retained to ensure compliance with HUD standards. Auditor Summary of the Auditees Comments on Findings and Recommendations: Document and maintain disbursement supporting information in the future for inspection. Response Indicator: Agreed. Completion Date: August 16, 2024 Reporting Views of Responsible Officials / Corrective Action Plan / Management Agent Response: Management agent is currently retaining documentation concerning disbursements in compliance with the HUD handbook and PRAC contract.