FAC Explorer

Audit 323592

FY End
2023-12-31
Total Expended
$7.74M
Findings
4
Programs
6
Organization: Housing Authority of Sunnyside, Washington (WA)
Year: 2023 Accepted: 2024-10-01
Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
501537 2023-001 Significant Deficiency - N
501538 2023-002 Significant Deficiency - L
1077979 2023-001 Significant Deficiency - N
1077980 2023-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
10.447 The Rural Development (rd) Multi-Family Housing Revitalization Demonstration Program (mpr) $4.78M - 0
10.415 Rural Rental Housing Loans $1.77M Yes 2
10.405 Farm Labor Housing Loans and Grants $437,855 - 0
14.850 Public and Indian Housing $292,623 - 0
14.872 Public Housing Capital Fund $247,293 - 0
10.427 Rural Rental Assistance Payments $218,666 - 0

Contacts

Name Title Type
GZLWCAJN4B95 Ketha Kimbrough Auditee
5098375454 Rich Larsen Auditor
No contacts on file

Notes to SEFA

Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the Authority 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 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 operations of the Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of the Authority. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the principles contained in the Uniform Guidance, 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: INDIRECT COST RATE The Authority has not elected to use the ten percent de minimus indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
Federal Agency: U.S. Department of Agriculture Federal Program Titles: Rural Rental Housing Loans Federal Assistance Listing Numbers: 10.415 Noncompliance - Replacement Reserve Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Controls over Compliance Criteria: Replacement Reserve. The Authority is required to establish and maintain a replacement reserve to aid in funding the repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by the USDA will be deposited annually in the reserve fund. These deposits are required to be made based on the RRHL Loan Agreement. Condition: Based upon inspection of the Authority's replacement reserve bank statements and on discussions with management, the replacement reserve account was not funded as required during the audit period. Context: During the audit period, the Authority did not make annual payments of $8,400 to the Sunnyview Apartments' replacement reserve account as required by the RRHL Loan Agreement. This had resulted in the replacement reserve account being underfunded. Known Questioned Costs: $528 Cause: There is a significant deficiency in internal controls over the compliance related to the maintenance of the replacement reserve account. Effect: The Rural Rental Housing Loan program is in non-compliance with the required deposits to the replacement reserve account. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and U.S. Department of Agriculture Loan agreement, to make the required annual deposits to the replacement reserve account. Views of responsible officials and planned corrective action plan: Management agrees with the finding and will implement the aforementioned recommendations.
Finding 2023-002
Federal Agency: U.S. Department of Agriculture Federal Program Titles: Rural Rental Housing Loans Federal Assistance Listing Numbers: 10.415 Noncompliance - Reporting Requirements Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Controls over Compliance Criteria: Reporting Requirements. The Authority is required to prepare Form RD 3560-7, Multiple Family Housing Project Budget/Utility Allowance Budget Actuals, and Form RD 3560-10, MFH Borrower Balance Sheet to the USDA for each RD property per USDA HB-2-3560 year-end reporting requirements. Condition: Based upon inspection of the Authority's Form RD 3560-7 and Form 3560-10 and discussions with management, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for each property during the audit period. Context: During the audit period, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for RRHL property, Sunnyview Apartments. Cause: There is a significant deficiency in internal controls over the compliance related to the reporting requirements for Forms RD 3560-7 and RD 3560-10. Effect: The Rural Rental Housing Loan program is in non-compliance with the reporting requirements related to Forms RD 3560-7 and RD 3560-10. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and U.S. Department of Agriculture reporting requirements. Views of responsible officials and planned corrective action plan: Management agrees with the finding and will implement the aforementioned recommendations.
Finding 2023-001
Federal Agency: U.S. Department of Agriculture Federal Program Titles: Rural Rental Housing Loans Federal Assistance Listing Numbers: 10.415 Noncompliance - Replacement Reserve Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Controls over Compliance Criteria: Replacement Reserve. The Authority is required to establish and maintain a replacement reserve to aid in funding the repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by the USDA will be deposited annually in the reserve fund. These deposits are required to be made based on the RRHL Loan Agreement. Condition: Based upon inspection of the Authority's replacement reserve bank statements and on discussions with management, the replacement reserve account was not funded as required during the audit period. Context: During the audit period, the Authority did not make annual payments of $8,400 to the Sunnyview Apartments' replacement reserve account as required by the RRHL Loan Agreement. This had resulted in the replacement reserve account being underfunded. Known Questioned Costs: $528 Cause: There is a significant deficiency in internal controls over the compliance related to the maintenance of the replacement reserve account. Effect: The Rural Rental Housing Loan program is in non-compliance with the required deposits to the replacement reserve account. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and U.S. Department of Agriculture Loan agreement, to make the required annual deposits to the replacement reserve account. Views of responsible officials and planned corrective action plan: Management agrees with the finding and will implement the aforementioned recommendations.
Finding 2023-002
Federal Agency: U.S. Department of Agriculture Federal Program Titles: Rural Rental Housing Loans Federal Assistance Listing Numbers: 10.415 Noncompliance - Reporting Requirements Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Controls over Compliance Criteria: Reporting Requirements. The Authority is required to prepare Form RD 3560-7, Multiple Family Housing Project Budget/Utility Allowance Budget Actuals, and Form RD 3560-10, MFH Borrower Balance Sheet to the USDA for each RD property per USDA HB-2-3560 year-end reporting requirements. Condition: Based upon inspection of the Authority's Form RD 3560-7 and Form 3560-10 and discussions with management, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for each property during the audit period. Context: During the audit period, the Authority did not prepare Forms RD 3560-7 and RD 3560-10 for RRHL property, Sunnyview Apartments. Cause: There is a significant deficiency in internal controls over the compliance related to the reporting requirements for Forms RD 3560-7 and RD 3560-10. Effect: The Rural Rental Housing Loan program is in non-compliance with the reporting requirements related to Forms RD 3560-7 and RD 3560-10. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and U.S. Department of Agriculture reporting requirements. Views of responsible officials and planned corrective action plan: Management agrees with the finding and will implement the aforementioned recommendations.