FAC Explorer

Audit 324253

FY End
2024-06-30
Total Expended
$827.25M
Findings
6
Programs
19
Organization: Kentucky Housing Corporation (TN)
Year: 2024 Accepted: 2024-10-09
Auditor: Crowe LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
502057 2024-001 - - B
502058 2024-001 - - B
502059 2024-001 - - B
1078499 2024-001 - - B
1078500 2024-001 - - B
1078501 2024-001 - - B

Programs

ALN Program Spent Major Findings
14.117 Mortgage Insurance Homes $509.24M Yes 0
14.871 Section 8 Housing Choice Vouchers $31.09M - 0
64.114 Veterans Housing Guaranteed and Insured Loans $26.19M - 0
10.410 Very Low to Moderate Income Housing Loans and Loan Guarantees $21.62M - 0
21.026 Covid-19 - Homeowner Assistance Fund $17.21M - 0
14.239 Home Investment Partnerships Program $12.36M Yes 0
21.023 Covid-19 - Emergency Rental Assistance Program $12.17M Yes 0
81.042 Weatherization Assistance for Low-Income Persons $9.48M - 0
14.267 Continuum of Care Program $7.05M Yes 1
93.568 Low-Income Home Energy Assistance $6.50M - 0
14.879 Mainstream Vouchers $3.72M - 0
14.U01 Emergency Housing Voucher $2.11M - 0
14.231 Emergency Solutions Grant Program $1.14M - 1
14.275 Housing Trust Fund $1.09M - 0
14.241 Housing Opportunities for Persons with Aids $982,735 - 0
14.327 Performance Based Contract Administrator Program $678,520 Yes 0
14.239 Covid-19 - Home Investment Partnerships Program $336,567 Yes 0
14.896 Family Self-Sufficiency Program $165,857 - 0
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $82,164 - 0

Contacts

Name Title Type
N362TZ7CFXC3 Michael Bianco Auditee
5025647630 Brad Schelle Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: As indicated in Note 1, the Corporation has prepared the Schedule on the accrual basis of accounting, which is a change from how the Schedule was prepared in previous years when it was presented on the cash basis of accounting. As a result of this change in basis of accounting, the Corporation has included $2,882,095 of fiscal year 2023 expenditures, that were not previously included in the fiscal year 2023 cash basis Schedule, on the fiscal year 2024 Schedule. De Minimis Rate Used: N Rate Explanation: Client elected not to use the De minimas cost Rate The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Kentucky Housing Corporation (the “Corporation”) under programs of the federal government for the year ended June 30, 2024. 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). Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Schedule has been prepared on the modified-accrual basis of accounting. Because the Schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the net position, changes in net position, or cash flows of the Corporation.
Title: NOTE 2 – CHANGE IN BASIS OF ACCOUNTING Accounting Policies: As indicated in Note 1, the Corporation has prepared the Schedule on the accrual basis of accounting, which is a change from how the Schedule was prepared in previous years when it was presented on the cash basis of accounting. As a result of this change in basis of accounting, the Corporation has included $2,882,095 of fiscal year 2023 expenditures, that were not previously included in the fiscal year 2023 cash basis Schedule, on the fiscal year 2024 Schedule. De Minimis Rate Used: N Rate Explanation: Client elected not to use the De minimas cost Rate As indicated in Note 1, the Corporation has prepared the Schedule on the accrual basis of accounting, which is a change from how the Schedule was prepared in previous years when it was presented on the cash basis of accounting. As a result of this change in basis of accounting, the Corporation has included $2,882,095 of fiscal year 2023 expenditures, that were not previously included in the fiscal year 2023 cash basis Schedule, on the fiscal year 2024 Schedule
Title: NOTE 3 – LOANS OUTSTANDING Accounting Policies: As indicated in Note 1, the Corporation has prepared the Schedule on the accrual basis of accounting, which is a change from how the Schedule was prepared in previous years when it was presented on the cash basis of accounting. As a result of this change in basis of accounting, the Corporation has included $2,882,095 of fiscal year 2023 expenditures, that were not previously included in the fiscal year 2023 cash basis Schedule, on the fiscal year 2024 Schedule. De Minimis Rate Used: N Rate Explanation: Client elected not to use the De minimas cost Rate The Department of Housing and Urban Development’s Mortgage Insurance (AL Number 14.117), Department of Agriculture’s Very Low to Moderate Income Housing Loans (AL Number 10.410), and Department of Veterans Affairs’ Veterans Housing – Guaranteed and Insured Loans (AL Number 64.114) represent those loans originated during the year ended June 30, 2024 by the Corporation. There are no continuing compliance requirements related to these loans. The total outstanding loan balances for each program at June 30, 2024, is as follows: AL Number 14.117 $ 127,870,390 AL Number 10.410 $ 43,757,832 AL Number 64.114 $ 6,644,356

Finding Details

Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.
Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.
Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.
Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.
Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.
Finding 2024-001
Finding 2024-001 – Unallowable Subrecipient Costs (Deficiency) Information on the Federal Programs: Continuum of Care – AL # 14.267 and Emergency Solutions Grant Program – AL # 14.231. Criteria: According to 2 CFR Part 200, Subpart F, 200.516, “the auditor must report the following as audit findings in a schedule of findings and questioned costs… Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards.” Condition: During the current fiscal year the Corporation, based on monitoring procedures performed, determined that one of their subrecipients had been making payments to fictitious vendors and/or vendors with a significant conflict of interest resulting in resulting in questioned or unallowable costs from fiscal year 2023 and fiscal year 2024 across the federal programs listed above. Cause: There was an apparent lack of internal controls and/or segregation of duties within the subrecipient entity that did not prevent these unallowable costs from being incurred at the subrecipient level. Additionally, Corporation management did not perform subrecipient monitoring procedures in a timely manner which resulted in unallowed costs being incurred before ultimately being detected by the Corporation. Effect: Questioned or unallowable known costs of $242,398 (as identified by the Corporation) from fiscal year 2023 and fiscal year 2024 were incurred across the federal programs listed below. Questioned Costs: Federal Program FY2024 Amount FY2023 Amount AL # 14.231 $24,753 $54,737 AL # 14.231 – COVID $0 $46,176 AL # 14.267 $37,602 $2,928 Unknown $6,813 $69,389 Context: As part of subrecipient monitoring, the Corporation identified some questioned costs related to one specific subrecipient. Management of the Corporation performed testing of the disbursements made to the subrecipient while the Executive Director was employed there (from July 31, 2022 through January 4, 2024) and determined that there were $242,398 of disbursements that were either unallowable based on the supporting documentation, or were questioned costs due to lack of supporting documentation. Crowe tested a sample of the disbursements from the same time period and the results from that sample agreed to the results the Corporation found.