FAC Explorer

Audit 324726

FY End
2024-06-30
Total Expended
$822,900
Findings
4
Programs
1
Organization: Beacon Heights, Inc. (NE)
Year: 2024 Accepted: 2024-10-15
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
502697 2024-001 - Yes N
502698 2024-001 - Yes N
1079139 2024-001 - Yes N
1079140 2024-001 - Yes N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $43,800 Yes 1

Contacts

Name Title Type
D92ALEWWEN65 Todd Schuiteman Auditee
4025733700 Darren Osten Auditor
No contacts on file

Notes to SEFA

Title: Note 4 - U.S. Department of Housing and Urban Development (HUD) Section 811 Capital Advance Accounting Policies: Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Beacon Heights, Inc. (BHI) under programs of the federal government for the year ended June 30, 2024. 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 the operations of BHI, it is not intended to and does not present the financial position, changes in net assets, or cash flows of BHI. 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: Note 3 - Indirect Cost Rate BHI does not draw for indirect administrative expenses and has not elected to use the 10‐percent deminimus indirect cost rate allowed under the Uniform Guidance. The HUD Section 811 Capital Advance is administered directly by BHI, and the balance and transactions relating to the capital advance are included in BHI’s financial statements. The capital advance outstanding is included in the federal expenditures included in the Schedule. The balance of loans outstanding at June 30, 2024 consists of: "See the Notes to the SEFA for the chart/table".

Finding Details

Finding 2024-001
US Department of Housing and Urban Development Federal Financial Assistance Listing #14.181 Supportive Housing for Persons with Disabilities Special Tests and Provisions – Reserve for Replacements Criteria: In accordance with the Regulatory Agreement from HUD, management will maintain a reserve for replacement account. The reserve for replacement account shall at all times be subject to the control of HUD. Monthly deposits are required into the reserve for replacement as required by HUD. Condition: The project did not make the required monthly deposits into the reserve account for the year. Cause: This occurred due to the renewal of the Project Rental Assistance Contract effective May 1, 2024 not being approved until July 2024 resulting in rental subsidies for May and June 2024 not being received until after year end. Management did not make the required monthly deposits until the rental subsidies for May and June were received. Effect: This resulted in an underfunded reserve for replacement account at June 30, 2024 in the amount of two monthly deposits totaling $2,126. Context: The Regulatory Agreement with HUD requires monthly deposits to the reserve for replacement account. The current required monthly deposit is $1,063. Only ten required monthly deposits were made during the year. Recommendation: We recommend that additional deposits be made to the reserve for replacement account for the underfunded amount. We also recommend processes and controls are established to monitor the activities of the reserve for replacement account to ensure compliance with HUD requirements. Views of Responsible Officials: Management concurs that the required monthly deposits were not made for the year. Management subsequently made the deposits into the reserve for replacement account on August 7, 2024 upon receipt of the May and June 2024 rental subsidies. Management will implement procedures to ensure future rental contract renewals will be more timely to ensure sufficient operating cash to make the required deposit into the reserve for replacement account as required by HUD.
Finding 2024-001
US Department of Housing and Urban Development Federal Financial Assistance Listing #14.181 Supportive Housing for Persons with Disabilities Special Tests and Provisions – Reserve for Replacements Criteria: In accordance with the Regulatory Agreement from HUD, management will maintain a reserve for replacement account. The reserve for replacement account shall at all times be subject to the control of HUD. Monthly deposits are required into the reserve for replacement as required by HUD. Condition: The project did not make the required monthly deposits into the reserve account for the year. Cause: This occurred due to the renewal of the Project Rental Assistance Contract effective May 1, 2024 not being approved until July 2024 resulting in rental subsidies for May and June 2024 not being received until after year end. Management did not make the required monthly deposits until the rental subsidies for May and June were received. Effect: This resulted in an underfunded reserve for replacement account at June 30, 2024 in the amount of two monthly deposits totaling $2,126. Context: The Regulatory Agreement with HUD requires monthly deposits to the reserve for replacement account. The current required monthly deposit is $1,063. Only ten required monthly deposits were made during the year. Recommendation: We recommend that additional deposits be made to the reserve for replacement account for the underfunded amount. We also recommend processes and controls are established to monitor the activities of the reserve for replacement account to ensure compliance with HUD requirements. Views of Responsible Officials: Management concurs that the required monthly deposits were not made for the year. Management subsequently made the deposits into the reserve for replacement account on August 7, 2024 upon receipt of the May and June 2024 rental subsidies. Management will implement procedures to ensure future rental contract renewals will be more timely to ensure sufficient operating cash to make the required deposit into the reserve for replacement account as required by HUD.
Finding 2024-001
US Department of Housing and Urban Development Federal Financial Assistance Listing #14.181 Supportive Housing for Persons with Disabilities Special Tests and Provisions – Reserve for Replacements Criteria: In accordance with the Regulatory Agreement from HUD, management will maintain a reserve for replacement account. The reserve for replacement account shall at all times be subject to the control of HUD. Monthly deposits are required into the reserve for replacement as required by HUD. Condition: The project did not make the required monthly deposits into the reserve account for the year. Cause: This occurred due to the renewal of the Project Rental Assistance Contract effective May 1, 2024 not being approved until July 2024 resulting in rental subsidies for May and June 2024 not being received until after year end. Management did not make the required monthly deposits until the rental subsidies for May and June were received. Effect: This resulted in an underfunded reserve for replacement account at June 30, 2024 in the amount of two monthly deposits totaling $2,126. Context: The Regulatory Agreement with HUD requires monthly deposits to the reserve for replacement account. The current required monthly deposit is $1,063. Only ten required monthly deposits were made during the year. Recommendation: We recommend that additional deposits be made to the reserve for replacement account for the underfunded amount. We also recommend processes and controls are established to monitor the activities of the reserve for replacement account to ensure compliance with HUD requirements. Views of Responsible Officials: Management concurs that the required monthly deposits were not made for the year. Management subsequently made the deposits into the reserve for replacement account on August 7, 2024 upon receipt of the May and June 2024 rental subsidies. Management will implement procedures to ensure future rental contract renewals will be more timely to ensure sufficient operating cash to make the required deposit into the reserve for replacement account as required by HUD.
Finding 2024-001
US Department of Housing and Urban Development Federal Financial Assistance Listing #14.181 Supportive Housing for Persons with Disabilities Special Tests and Provisions – Reserve for Replacements Criteria: In accordance with the Regulatory Agreement from HUD, management will maintain a reserve for replacement account. The reserve for replacement account shall at all times be subject to the control of HUD. Monthly deposits are required into the reserve for replacement as required by HUD. Condition: The project did not make the required monthly deposits into the reserve account for the year. Cause: This occurred due to the renewal of the Project Rental Assistance Contract effective May 1, 2024 not being approved until July 2024 resulting in rental subsidies for May and June 2024 not being received until after year end. Management did not make the required monthly deposits until the rental subsidies for May and June were received. Effect: This resulted in an underfunded reserve for replacement account at June 30, 2024 in the amount of two monthly deposits totaling $2,126. Context: The Regulatory Agreement with HUD requires monthly deposits to the reserve for replacement account. The current required monthly deposit is $1,063. Only ten required monthly deposits were made during the year. Recommendation: We recommend that additional deposits be made to the reserve for replacement account for the underfunded amount. We also recommend processes and controls are established to monitor the activities of the reserve for replacement account to ensure compliance with HUD requirements. Views of Responsible Officials: Management concurs that the required monthly deposits were not made for the year. Management subsequently made the deposits into the reserve for replacement account on August 7, 2024 upon receipt of the May and June 2024 rental subsidies. Management will implement procedures to ensure future rental contract renewals will be more timely to ensure sufficient operating cash to make the required deposit into the reserve for replacement account as required by HUD.