FAC Explorer

Audit 324305

FY End
2024-03-31
Total Expended
$8.48M
Findings
2
Programs
1
Organization: Village Cooperative of Lee's Summit (MO)
Year: 2024 Accepted: 2024-10-09
Auditor: Mahoney

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
502108 2024-001 Significant Deficiency - P
1078550 2024-001 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.126 Mortgage Insurance_cooperative Projects $8.48M Yes 1

Contacts

Name Title Type
S3NXZFBJNBQ7 Hannah Parrott Auditee
3195724298 Darren Fetzer Auditor
No contacts on file

Notes to SEFA

Title: Insured Mortgage Loan Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the Cooperative under programs of the federal government for the year ended March 31, 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 (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Cooperative, it is not intended to and does not present the financial position, results of operations, or cash flows of the Cooperative. De Minimis Rate Used: N Rate Explanation: The Cooperative’s federal award is not based on eligible costs incurred. Accordingly, the Cooperative has not made an election related to use of the 10% de minimis indirect cost rate described in the Uniform Guidance. Federal expenditures for the mortgage insurance program represent the principal balance of the insured loan as of March 31, 2023. The loan is outstanding from a previous period. The federal government imposes continuing compliance requirements on this loan. The loan balance at March 31, 2024 was $8,342,521.

Finding Details

Finding 2024-001
Significant Deficiency and Noncompliance – Unapproved General Operating Reserve Withdrawal Department of Housing and Urban Development Assistance Listing Number 14.126 –Mortgage Insurance - Cooperative Projects Significant Deficiency and Noncompliance Category of Finding – Special Tests and Provisions Criteria - The HUD regulatory agreement requires the Cooperative to establish and maintain a general operating reserve. Withdrawals from the reserve in excess of 20% of the balance of the previous year-end require prior written approval by HUD. Condition - Excess withdrawals of $20,419 were taken from the general operating reserve without obtaining the proper HUD approval. Cause - The Cooperative inadvertently omitted obtaining the proper HUD approval to withdrawal the general operating reserve funds in excess of 20% of the balance of the previous year-end. Effect - The Cooperative was out of compliance with their HUD regulatory agreement at March 31, 2024. Recommendation - We recommend that the Cooperative implement a control process to ensure adherence to the regulatory agreement and obtain the proper HUD approval to withdrawal general operating reserve funds. Auditee’s comment - In April 2024, prior to the conclusion of the audit, the Cooperative made deposits totaling $36,916 to the general operating reserve to fund the reserve to its proper balance. The management agent will implement a process to ensure withdrawals are made as required by the regulatory agreement. Status - Resolved Responsible party for corrective action – Alexis Anderson, President of Anderson Asset Property Group, LLC (Management Agent)
Finding 2024-001
Significant Deficiency and Noncompliance – Unapproved General Operating Reserve Withdrawal Department of Housing and Urban Development Assistance Listing Number 14.126 –Mortgage Insurance - Cooperative Projects Significant Deficiency and Noncompliance Category of Finding – Special Tests and Provisions Criteria - The HUD regulatory agreement requires the Cooperative to establish and maintain a general operating reserve. Withdrawals from the reserve in excess of 20% of the balance of the previous year-end require prior written approval by HUD. Condition - Excess withdrawals of $20,419 were taken from the general operating reserve without obtaining the proper HUD approval. Cause - The Cooperative inadvertently omitted obtaining the proper HUD approval to withdrawal the general operating reserve funds in excess of 20% of the balance of the previous year-end. Effect - The Cooperative was out of compliance with their HUD regulatory agreement at March 31, 2024. Recommendation - We recommend that the Cooperative implement a control process to ensure adherence to the regulatory agreement and obtain the proper HUD approval to withdrawal general operating reserve funds. Auditee’s comment - In April 2024, prior to the conclusion of the audit, the Cooperative made deposits totaling $36,916 to the general operating reserve to fund the reserve to its proper balance. The management agent will implement a process to ensure withdrawals are made as required by the regulatory agreement. Status - Resolved Responsible party for corrective action – Alexis Anderson, President of Anderson Asset Property Group, LLC (Management Agent)