FAC Explorer

Audit 325216

FY End
2024-03-31
Total Expended
$1.47M
Findings
6
Programs
4
Organization: Vernon Senior Citizens Housing Development Corp. Operating As Sunshine Center Apartments (FL)
Year: 2024 Accepted: 2024-10-18
Auditor: Bellows Associates P A

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
503164 2024-001 - - E
503165 2024-002 - - N
503166 2024-003 - - N
1079606 2024-001 - - E
1079607 2024-002 - - N
1079608 2024-003 - - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.22M Yes 3
14.195 Section 8 Housing Assistance Payments Program $232,409 - 0
14.191 Multifamily Housing Service Coordinators $22,166 - 0
14.195 Section 8 Housing Assistance Payments Program - Covid-19 $2,147 - 0

Contacts

Name Title Type
VUUEXAGFN6R8 Irene Phillips Auditee
9548359200 Jennifer R. Koffman Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION 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. De Minimis Rate Used: N Rate Explanation: Vernon Senior Citizens Housing Development Corporation 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 includes the federal grant activity of Vernon Senior Citizens Housing Development Corporation, operating as Sunshine Center Apartments, HUD Project No. 064-11138, and is presented on the accrual basis of accounting. 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 Vernon Senior Citizens Housing Development Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Vernon Senior Citizens Housing Development Corporation.
Title: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REFINANCE LOAN 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. De Minimis Rate Used: N Rate Explanation: Vernon Senior Citizens Housing Development Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Vernon Senior Citizens Housing Development Corporation received a HUD mortgage insurance for the refinancing of existing multifamily housing projects under Section 207 of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Vernon Senior Citizens Housing Development Corporation received no additional loans during the year. The balance of the loan outstanding as of March 31, 2024 was $1,188,787.

Finding Details

Finding 2024-001
FINDING No. 2024-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Thirty-nine tenants. Sample Size Information: Six tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require all initial and ongoing tenant eligibility documentation to be appropriately executed and maintained. Additionally, HUD requires timely verification of the tenant’s current income through the use of Enterprise Income Verification (EIV) reports. Statement of Condition: Missing documentation in tenant files: • One tenant file was unable to be obtained. • One tenant file did not contain verification of current income through the use of the EIV report and the indication of the date and time received was not present on the application. Cause: The Project did not maintain appropriate tenant eligibility documentation as required by HUD. Effect or Potential Effect: Unable to properly verify the tenant's income, eligibility of residency, and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that tenant eligibility is verified, and tenant files are properly maintained. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Staff training has been provided and included in monthly reporting procedures.
Finding 2024-002
FINDING No. 2024-002: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: HAP revenue. Sample Size Information: Monthly HAP requests. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, a HUD approved rent change must be executed as of its effective date, and all earned revenue recorded in the correct period. Statement of Condition: The Project did not implement the HUD approved rent change to its monthly HAP requests as of the October 1, 2023 effective date, resulting in a $7,686 omission. Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of HAP for each unit. Effect or Potential Effect: The Project did not request $7,686 of HAP funding in the audit period, nor record the receivable as of year-end. An audit adjustment was posted to reflect the correct HAP revenue for the year. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should comply with HUD regulations for executing the required rent change as of its effective date and all earned revenue recorded in the correct period. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of timely processing of authorized rent changes.
Finding 2024-003
FINDING No. 2024-003: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Replacement reserve account. Sample Size Information: Replacement reserve deposits. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulation, timely monthly deposits must be made to the Replacement Reserve account. Statement of Condition: The Project underfunded the account by $338. Cause: The Project did not implement the increase to the required monthly deposit in a timely manner. Effect or Potential Effect: Deficiently funded reserve for replacement account. Auditor Non-Compliance Code: N – Reserve for Replacements Deposits. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that the correct amount is deposited into the replacement reserve account each month and make a retro deposit for the underfunded amount. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of correctly depositing funds into replacement reserves.
Finding 2024-001
FINDING No. 2024-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Thirty-nine tenants. Sample Size Information: Six tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require all initial and ongoing tenant eligibility documentation to be appropriately executed and maintained. Additionally, HUD requires timely verification of the tenant’s current income through the use of Enterprise Income Verification (EIV) reports. Statement of Condition: Missing documentation in tenant files: • One tenant file was unable to be obtained. • One tenant file did not contain verification of current income through the use of the EIV report and the indication of the date and time received was not present on the application. Cause: The Project did not maintain appropriate tenant eligibility documentation as required by HUD. Effect or Potential Effect: Unable to properly verify the tenant's income, eligibility of residency, and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that tenant eligibility is verified, and tenant files are properly maintained. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Staff training has been provided and included in monthly reporting procedures.
Finding 2024-002
FINDING No. 2024-002: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: HAP revenue. Sample Size Information: Monthly HAP requests. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, a HUD approved rent change must be executed as of its effective date, and all earned revenue recorded in the correct period. Statement of Condition: The Project did not implement the HUD approved rent change to its monthly HAP requests as of the October 1, 2023 effective date, resulting in a $7,686 omission. Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of HAP for each unit. Effect or Potential Effect: The Project did not request $7,686 of HAP funding in the audit period, nor record the receivable as of year-end. An audit adjustment was posted to reflect the correct HAP revenue for the year. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should comply with HUD regulations for executing the required rent change as of its effective date and all earned revenue recorded in the correct period. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of timely processing of authorized rent changes.
Finding 2024-003
FINDING No. 2024-003: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Replacement reserve account. Sample Size Information: Replacement reserve deposits. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulation, timely monthly deposits must be made to the Replacement Reserve account. Statement of Condition: The Project underfunded the account by $338. Cause: The Project did not implement the increase to the required monthly deposit in a timely manner. Effect or Potential Effect: Deficiently funded reserve for replacement account. Auditor Non-Compliance Code: N – Reserve for Replacements Deposits. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that the correct amount is deposited into the replacement reserve account each month and make a retro deposit for the underfunded amount. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of correctly depositing funds into replacement reserves.