FAC Explorer

Audit 323017

FY End
2023-12-31
Total Expended
$8.70M
Findings
8
Programs
1
Organization: Minford Gardens Housing Development Fund Company, INC (NY)
Year: 2023 Accepted: 2024-09-30
Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
500172 2023-001 Material Weakness Yes B
500173 2023-002 Material Weakness - H
500174 2023-001 Material Weakness Yes B
500175 2023-002 Material Weakness - H
1076614 2023-001 Material Weakness Yes B
1076615 2023-002 Material Weakness - H
1076616 2023-001 Material Weakness Yes B
1076617 2023-002 Material Weakness - H

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $1.06M Yes 2

Contacts

Name Title Type
GHXQKD85AHR3 Derrick Lovett Auditee
3472262474 Frank Buss II Auditor
No contacts on file

Notes to SEFA

Title: Note 3 - U.S. Department of Housing and Urban Development loan program Accounting Policies: Note 1 - Basis of presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Minford Gardens Housing Development Fund Company, Inc., HUD Project No. 012-EE-027 NY 36-S911-027, under programs of the federal government for the year ended December 31, 2023. The information in the Schedule is presented in accordance with the requirements of Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. Note 2 - Summary of significant accounting policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowed. Assistance Listing numbers (“AL No.”) are provided when available. De Minimis Rate Used: N Rate Explanation: Functional allocation of expenses The costs of providing programs and other activities are summarized on a functional basis in Note 9. Management and general expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of the Company. Accordingly, certain costs have been allocated among program services and administrative and support services benefited. Such allocations are determined by management on an equitable basis. 100% of management fees and audit expenses are allocated to management and general expense with the remaining expenses allocated to program services expense. The Company had no fundraising expense for the year ended December 31, 2023.. Minford Gardens Housing Development Fund Company, Inc. has received a U.S. Department of Housing and Urban Development direct loan under Section 202 of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Minford Gardens Housing Development Fund Company, Inc. received no additional loans during the year. The balance of the loan outstanding at December 31, 2023, consists of: AL Number: 14.157; Program Name: Section 202 direct loan; Outstanding balance at December 31, 2023: $7,646,500

Finding Details

Finding 2023-001
Finding No. 2023-1 Statement of Condition Residual receipts were not properly deposited into an account in accordance with HUD requirements. Criteria Owners must deposit residual receipts into a separate account within 90 days of the end of the fiscal year. Questioned Costs $586,006 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that the residual receipts were properly deposited in a separate account. Recommendation We recommend that owners take the specific actions of depositing the residual receipts into a separate account in accordance with HUD requirements. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: B – Failure to make required residual receipts deposits.
Finding 2023-002
Finding No. 2023-2 Statement of Condition During 2023, the Company made unauthorized payments to related parties in the amount of $144,097. Criteria The Company must make required surplus cash deposits to the residual receipts reserve prior to making payments on related party payables. Questioned Costs $144,097 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that surplus cash is deposited to the residual receipts reserve prior to making payments on related party payables. Recommendation Management should establish internal controls and procedures to ensure that surplus cash is properly monitored and disbursed. The unauthorized payments should be returned to the Company. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for accounting for this in the future. Management will ensure that the unauthorized payments will be returned to the Company. Auditor Noncompliance Code: H – Unauthorized distributions of project assets
Finding 2023-001
Finding No. 2023-1 Statement of Condition Residual receipts were not properly deposited into an account in accordance with HUD requirements. Criteria Owners must deposit residual receipts into a separate account within 90 days of the end of the fiscal year. Questioned Costs $586,006 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that the residual receipts were properly deposited in a separate account. Recommendation We recommend that owners take the specific actions of depositing the residual receipts into a separate account in accordance with HUD requirements. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: B – Failure to make required residual receipts deposits.
Finding 2023-002
Finding No. 2023-2 Statement of Condition During 2023, the Company made unauthorized payments to related parties in the amount of $144,097. Criteria The Company must make required surplus cash deposits to the residual receipts reserve prior to making payments on related party payables. Questioned Costs $144,097 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that surplus cash is deposited to the residual receipts reserve prior to making payments on related party payables. Recommendation Management should establish internal controls and procedures to ensure that surplus cash is properly monitored and disbursed. The unauthorized payments should be returned to the Company. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for accounting for this in the future. Management will ensure that the unauthorized payments will be returned to the Company. Auditor Noncompliance Code: H – Unauthorized distributions of project assets
Finding 2023-001
Finding No. 2023-1 Statement of Condition Residual receipts were not properly deposited into an account in accordance with HUD requirements. Criteria Owners must deposit residual receipts into a separate account within 90 days of the end of the fiscal year. Questioned Costs $586,006 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that the residual receipts were properly deposited in a separate account. Recommendation We recommend that owners take the specific actions of depositing the residual receipts into a separate account in accordance with HUD requirements. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: B – Failure to make required residual receipts deposits.
Finding 2023-002
Finding No. 2023-2 Statement of Condition During 2023, the Company made unauthorized payments to related parties in the amount of $144,097. Criteria The Company must make required surplus cash deposits to the residual receipts reserve prior to making payments on related party payables. Questioned Costs $144,097 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that surplus cash is deposited to the residual receipts reserve prior to making payments on related party payables. Recommendation Management should establish internal controls and procedures to ensure that surplus cash is properly monitored and disbursed. The unauthorized payments should be returned to the Company. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for accounting for this in the future. Management will ensure that the unauthorized payments will be returned to the Company. Auditor Noncompliance Code: H – Unauthorized distributions of project assets
Finding 2023-001
Finding No. 2023-1 Statement of Condition Residual receipts were not properly deposited into an account in accordance with HUD requirements. Criteria Owners must deposit residual receipts into a separate account within 90 days of the end of the fiscal year. Questioned Costs $586,006 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that the residual receipts were properly deposited in a separate account. Recommendation We recommend that owners take the specific actions of depositing the residual receipts into a separate account in accordance with HUD requirements. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: B – Failure to make required residual receipts deposits.
Finding 2023-002
Finding No. 2023-2 Statement of Condition During 2023, the Company made unauthorized payments to related parties in the amount of $144,097. Criteria The Company must make required surplus cash deposits to the residual receipts reserve prior to making payments on related party payables. Questioned Costs $144,097 Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls and actions were not taken to ensure that surplus cash is deposited to the residual receipts reserve prior to making payments on related party payables. Recommendation Management should establish internal controls and procedures to ensure that surplus cash is properly monitored and disbursed. The unauthorized payments should be returned to the Company. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for accounting for this in the future. Management will ensure that the unauthorized payments will be returned to the Company. Auditor Noncompliance Code: H – Unauthorized distributions of project assets