Audit 323596

FY End

2023-12-31

Total Expended

$1.58M

Findings

4

Programs

1

Organization: Stand Down Housing, Inc. (RI)

Year: 2023 Accepted: 2024-10-02

Auditor: Damiano Burk & Nuttall PC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
501542	2023-001	Significant Deficiency	-	E
501543	2023-002	Significant Deficiency	-	C
1077984	2023-001	Significant Deficiency	-	E
1077985	2023-002	Significant Deficiency	-	C

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$79,891	Yes	2

Contacts

Name	Title	Type
KPWGPJDE5UH5	Erik Wallin, Esq.	Auditee
4013834730	Victoria Sylvia	Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Stand Down Housing, Inc. 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 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 Stand Down Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Stand Down Housing, Inc..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. De Minimis Rate Used: Y Rate Explanation: Stand Down Housing, Inc. has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Stand Down Housing, Inc. 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 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 Stand Down Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Stand Down Housing, Inc.

Title: Summary of Significant Accounting Policies Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Stand Down Housing, Inc. 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 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 Stand Down Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Stand Down Housing, Inc..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. De Minimis Rate Used: Y Rate Explanation: Stand Down Housing, Inc. has elected to use the 10% de minimis indirect cost rate as 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.

Title: Indirect Cost Rate Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Stand Down Housing, Inc. 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 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 Stand Down Housing, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Stand Down Housing, Inc..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. De Minimis Rate Used: Y Rate Explanation: Stand Down Housing, Inc. has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Stand Down Housing, Inc. has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2023-001

Condition: Two tenant files selected from a sample of five tenant files tested were missing the move in inspection and tenant security deposit listed on lease does not agree to listing, as required by HUD. Criteria: Properly maintained tenant files are supposed to include all required items.Cause: Prior management had an oversight in internal controls to ensure that all required documents are maintained in tenant files. Housing Opportunities Corporation (HOC) took over as management agent in April 2023. Effect or Potential Effect: The Corporation is not in compliance with its Project Rental Assistance Contract and Tenant Selection Plan. Recommendation: Management should design and implement internal controls to ensure all required documentation is collected and maintained for all tenants and will conduct an inspection of all tenant files to ensure completeness. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditor’s finding and recommendation. A new management agent was hired in April 2023 to oversee the implementation of a comprehensive internal control system, ensuring all tenant files include required documentation.

Finding 2023-002

Condition: During 2023, there was a shortfall of $7,498 in required deposits into the reserve for replacements. Criteria: As of December 31, 2023, in accordance with the Section 811 Capital Advance Program ("Program") Regulatory Agreement ("Agreement") with the United States Department of Housing and Urban Development ("HUD"), the Corporation is obligated to establish and maintain a reserve for replacements in a separate bank account under the Corporation's name. The Corporation is required to make monthly payments of $1,000 for the fiscal year 2023, unless a different amount or schedule is approved in writing by HUD. During 2023, the Corporation deposited $2,002 into the reserve and made an advance payment of $2,500 towards 2023 contributions in 2022. This resulted in a shortfall of $7,498. Cause: Failure to make all required payments into the replacement reserve during the period under audit as result of the Corporation not having the cash to make the deposits. Effect or Potential Effect: Noncompliance with the terms and requirements of the Agreement as well as the compliance requirements of the Program 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. Recommendation: We recommend that the Corporation make up the shortfall of deposits in the subsequent period and on a going forward basis, make the monthly required reserve for replacement deposits. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditor’s finding and recommendation. The Corporation will subsequently make the necessary deposits to align the reserve for replacement balance with the requirements of the Section 811 Capital Advance Program Regulatory Agreement.

Finding 2023-001

Condition: Two tenant files selected from a sample of five tenant files tested were missing the move in inspection and tenant security deposit listed on lease does not agree to listing, as required by HUD. Criteria: Properly maintained tenant files are supposed to include all required items.Cause: Prior management had an oversight in internal controls to ensure that all required documents are maintained in tenant files. Housing Opportunities Corporation (HOC) took over as management agent in April 2023. Effect or Potential Effect: The Corporation is not in compliance with its Project Rental Assistance Contract and Tenant Selection Plan. Recommendation: Management should design and implement internal controls to ensure all required documentation is collected and maintained for all tenants and will conduct an inspection of all tenant files to ensure completeness. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditor’s finding and recommendation. A new management agent was hired in April 2023 to oversee the implementation of a comprehensive internal control system, ensuring all tenant files include required documentation.

Finding 2023-002

Condition: During 2023, there was a shortfall of $7,498 in required deposits into the reserve for replacements. Criteria: As of December 31, 2023, in accordance with the Section 811 Capital Advance Program ("Program") Regulatory Agreement ("Agreement") with the United States Department of Housing and Urban Development ("HUD"), the Corporation is obligated to establish and maintain a reserve for replacements in a separate bank account under the Corporation's name. The Corporation is required to make monthly payments of $1,000 for the fiscal year 2023, unless a different amount or schedule is approved in writing by HUD. During 2023, the Corporation deposited $2,002 into the reserve and made an advance payment of $2,500 towards 2023 contributions in 2022. This resulted in a shortfall of $7,498. Cause: Failure to make all required payments into the replacement reserve during the period under audit as result of the Corporation not having the cash to make the deposits. Effect or Potential Effect: Noncompliance with the terms and requirements of the Agreement as well as the compliance requirements of the Program 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. Recommendation: We recommend that the Corporation make up the shortfall of deposits in the subsequent period and on a going forward basis, make the monthly required reserve for replacement deposits. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditor’s finding and recommendation. The Corporation will subsequently make the necessary deposits to align the reserve for replacement balance with the requirements of the Section 811 Capital Advance Program Regulatory Agreement.