FAC Explorer

Audit 324375

FY End
2024-06-25
Total Expended
$5.12M
Findings
10
Programs
2
Organization: Cathedral Towers, INC (GA)
Year: 2024 Accepted: 2024-10-10
Auditor: Windham Brannon LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
502261 2024-002 - Yes N
502262 2024-003 - Yes N
502263 2024-004 - - N
502264 2024-005 - - N
502265 2024-006 - - N
1078703 2024-002 - Yes N
1078704 2024-003 - Yes N
1078705 2024-004 - - N
1078706 2024-005 - - N
1078707 2024-006 - - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.72M Yes 0
14.157 Supportive Housing for the Elderly $1.41M Yes 5

Contacts

Name Title Type
ME26PA7M77N4 David Rocchio Auditee
4046632838 Daniel Pullman Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – Basis of Presentation Accounting Policies: NOTE 1 – Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Cathedral Towers, Inc., HUD Project No. 061-11243, under programs of the federal government as of and for the period ended June 25, 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). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. NOTE 2 – Summary of Significant Accounting Policies 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Passthrough entity identifying numbers are presented where applicable. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 3 – Federally Funded and Insured Mortgages The mortgage balance at the beginning of the period and loans made during the period are included in the federal expenditures presented in the Schedule. The balance of the outstanding federally insured mortgage at June 25, 2024 is $3,661,121. The balance was repaid in full subsequent to period end as a result of the Transaction in footnote 1. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Cathedral Towers, Inc., HUD Project No. 061-11243, under programs of the federal government as of and for the period ended June 25, 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). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization.
Title: NOTE 2 – Summary of Significant Accounting Policies Accounting Policies: NOTE 1 – Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Cathedral Towers, Inc., HUD Project No. 061-11243, under programs of the federal government as of and for the period ended June 25, 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). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. NOTE 2 – Summary of Significant Accounting Policies 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Passthrough entity identifying numbers are presented where applicable. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 3 – Federally Funded and Insured Mortgages The mortgage balance at the beginning of the period and loans made during the period are included in the federal expenditures presented in the Schedule. The balance of the outstanding federally insured mortgage at June 25, 2024 is $3,661,121. The balance was repaid in full subsequent to period end as a result of the Transaction in footnote 1. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 2 – Summary of Significant Accounting Policies 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Passthrough entity identifying numbers are presented where applicable. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 3 – Federally Funded and Insured Mortgages Accounting Policies: NOTE 1 – Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Cathedral Towers, Inc., HUD Project No. 061-11243, under programs of the federal government as of and for the period ended June 25, 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). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. NOTE 2 – Summary of Significant Accounting Policies 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Passthrough entity identifying numbers are presented where applicable. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 3 – Federally Funded and Insured Mortgages The mortgage balance at the beginning of the period and loans made during the period are included in the federal expenditures presented in the Schedule. The balance of the outstanding federally insured mortgage at June 25, 2024 is $3,661,121. The balance was repaid in full subsequent to period end as a result of the Transaction in footnote 1. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The mortgage balance at the beginning of the period and loans made during the period are included in the federal expenditures presented in the Schedule. The balance of the outstanding federally insured mortgage at June 25, 2024 is $3,661,121. The balance was repaid in full subsequent to period end as a result of the Transaction in footnote 1.

Finding Details

Finding 2024-002
Finding Number 2024-2 Condition: Cathedral Towers did not ensure that all appropriate parties signed the HUD Form 9887/9887A. Criteria: Per HUD Handbook 4350.3, all members of an applicant or tenant family who are at least 18 years of age must sign and date the HUD-required consent forms (HUD-9887 and HUD-9887A) at the initial certification and at each recertification. Cause: Procedures are in place to verify appropriate signatures and completeness of tenant application and recertification files; however, one signature was erroneously missed in the recertification process. Effect: One tenant signature was missing on the tenant’s HUD-9887-A consent form. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure completeness of recertification files is maintained. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application and recertification processes to ensure all required signatures are obtained.
Finding 2024-003
Finding Number 2024-3 Condition: Cathedral Towers did not indicate the date and time received on six applications. Criteria: Per HUD Handbook 4350.3, the project owner must indicate on the application the date and time received, either by using a date and time stamp or by writing and initialing the date and time received. Cause: Applications are generally stamped with the date and time received and signed by a representative of Cathedral Towers, Inc. Six stamps or signatures were not appropriately identified in tenant files reviewed during compliance testing. Effect: Six tenant applications did not include evidence of the date and time received. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure tenant application files include evidence of the date and time received. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application process to ensure the required steps are performed and documented.
Finding 2024-004
Finding Number 2024-4 Condition: Cathedral Towers did not ensure that all required and updated information related to income limits on HUD Form 50059 was included in four tenant files. Criteria: Per HUD Handbook 4350.3, the project owner must retain a completed and updated copy of HUD Form 50059. Cause: Tenant files are required to include the completed and updated Form 50059. Incomplete or outdated Form 50059s were included in four tenant files. Effect: Four Form 50059s included in tenant files were incomplete or outdated. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure all forms related to income limits in the recertification process are complete. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application process to ensure the required forms are completed and included.
Finding 2024-005
Finding Number 2024-5 Condition: Cathedral Towers did not ensure that appropriate documentation of move out inspections was retained for two tenants that moved out during the period. Criteria: Per HUD Handbook 4350.3, the project owner must document move out inspections upon the unit being vacated by the tenant. Cause: Tenant files for vacated units typically contain the move out inspection documentation signed by the member of management completing the inspection. For two tenant files related to vacated units, there were no move out inspections retained in the file. Effect: Two move out inspections were not appropriately documented. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure all move out inspections are appropriately documented upon the unit being vacated by the tenant. Auditee’s Response: Cathedral Towers agreed with the finding and will review the move out inspection process to ensure the required forms are completed and included.
Finding 2024-006
Finding Number 2024-6 Condition: Cathedral Towers did not ensure that appropriate documentation of the timely repayment of tenant security deposit refunds upon vacating the unit was retained in three tenant files. Criteria: Per HUD Handbook 4350.3, the project owner must provide the tenant with a refund of the security deposit or an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair within 30 days after the move-out date. Cause: Tenant security deposits are generally remitted timely following the move-out date and tenant files for vacated units typically contain evidence of the refund amount and documentation of any deductions charged against the security deposit. For two vacated units, there was no evidence of a security deposit refund retained in the tenant file. For another vacated unit, the refund was not remitted to the tenant within 30 days. Effect: One security deposit was not timely remitted following the move-out date. Two additional tenant files did not contain adequate documentation to determine whether the security deposit refund was remitted timely. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure security deposits are refunded timely and evidence of the refunds is appropriately documented upon the unit being vacated by the tenant. Auditee’s Response: Cathedral Towers agreed with the finding and will review the move out inspection process to ensure the security deposit refunds are made timely and documented appropriately.
Finding 2024-002
Finding Number 2024-2 Condition: Cathedral Towers did not ensure that all appropriate parties signed the HUD Form 9887/9887A. Criteria: Per HUD Handbook 4350.3, all members of an applicant or tenant family who are at least 18 years of age must sign and date the HUD-required consent forms (HUD-9887 and HUD-9887A) at the initial certification and at each recertification. Cause: Procedures are in place to verify appropriate signatures and completeness of tenant application and recertification files; however, one signature was erroneously missed in the recertification process. Effect: One tenant signature was missing on the tenant’s HUD-9887-A consent form. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure completeness of recertification files is maintained. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application and recertification processes to ensure all required signatures are obtained.
Finding 2024-003
Finding Number 2024-3 Condition: Cathedral Towers did not indicate the date and time received on six applications. Criteria: Per HUD Handbook 4350.3, the project owner must indicate on the application the date and time received, either by using a date and time stamp or by writing and initialing the date and time received. Cause: Applications are generally stamped with the date and time received and signed by a representative of Cathedral Towers, Inc. Six stamps or signatures were not appropriately identified in tenant files reviewed during compliance testing. Effect: Six tenant applications did not include evidence of the date and time received. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure tenant application files include evidence of the date and time received. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application process to ensure the required steps are performed and documented.
Finding 2024-004
Finding Number 2024-4 Condition: Cathedral Towers did not ensure that all required and updated information related to income limits on HUD Form 50059 was included in four tenant files. Criteria: Per HUD Handbook 4350.3, the project owner must retain a completed and updated copy of HUD Form 50059. Cause: Tenant files are required to include the completed and updated Form 50059. Incomplete or outdated Form 50059s were included in four tenant files. Effect: Four Form 50059s included in tenant files were incomplete or outdated. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure all forms related to income limits in the recertification process are complete. Auditee’s Response: Cathedral Towers agreed with the finding and will review the application process to ensure the required forms are completed and included.
Finding 2024-005
Finding Number 2024-5 Condition: Cathedral Towers did not ensure that appropriate documentation of move out inspections was retained for two tenants that moved out during the period. Criteria: Per HUD Handbook 4350.3, the project owner must document move out inspections upon the unit being vacated by the tenant. Cause: Tenant files for vacated units typically contain the move out inspection documentation signed by the member of management completing the inspection. For two tenant files related to vacated units, there were no move out inspections retained in the file. Effect: Two move out inspections were not appropriately documented. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure all move out inspections are appropriately documented upon the unit being vacated by the tenant. Auditee’s Response: Cathedral Towers agreed with the finding and will review the move out inspection process to ensure the required forms are completed and included.
Finding 2024-006
Finding Number 2024-6 Condition: Cathedral Towers did not ensure that appropriate documentation of the timely repayment of tenant security deposit refunds upon vacating the unit was retained in three tenant files. Criteria: Per HUD Handbook 4350.3, the project owner must provide the tenant with a refund of the security deposit or an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair within 30 days after the move-out date. Cause: Tenant security deposits are generally remitted timely following the move-out date and tenant files for vacated units typically contain evidence of the refund amount and documentation of any deductions charged against the security deposit. For two vacated units, there was no evidence of a security deposit refund retained in the tenant file. For another vacated unit, the refund was not remitted to the tenant within 30 days. Effect: One security deposit was not timely remitted following the move-out date. Two additional tenant files did not contain adequate documentation to determine whether the security deposit refund was remitted timely. Amount in Questioned Cost: $0 Recommendation: Cathedral Towers should review the procedures in place to ensure security deposits are refunded timely and evidence of the refunds is appropriately documented upon the unit being vacated by the tenant. Auditee’s Response: Cathedral Towers agreed with the finding and will review the move out inspection process to ensure the security deposit refunds are made timely and documented appropriately.