FAC Explorer

Audit 325460

FY End
2024-06-30
Total Expended
$1.41M
Findings
2
Programs
3
Organization: Telos, Inc. (WI)
Year: 2024 Accepted: 2024-10-22
Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
503295 2024-001 Material Weakness - N
1079737 2024-001 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.04M Yes 1
14.181 Supportive Housing for Persons with Disabilities, Section 8 Hap Contract $348,306 - 0
14.191 Multifamily Housing Service Coordinators $29,133 - 0

Contacts

Name Title Type
DWZXVTBQN535 Margaret Kidder Auditee
4143855330 Krista Pankop Auditor
No contacts on file

Notes to SEFA

Title: Federally Insured Mortgage Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations or 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. De Minimis Rate Used: N Rate Explanation: The Project 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 year is included in the federal expenditures presented in the Schedule. The mortgage balance at June 30, 2024 is as follows: Program Name: Mortgage insurance for the purchase or refinancing of existing multifamily housing projects Federal Assistance Listing Number: 14.155 Outstanding Balance: $ 1,008,453
Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations or 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. De Minimis Rate Used: N Rate Explanation: The Project 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 Telos, Inc. (the Project) 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). Because the Schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Project.

Finding Details

Finding 2024-001
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.155 Federal Program: Mortgage insurance for the purchase or refinancing of existing multifamily housing projects Statement of Condition: The Project did not have adequate and effective controls over compliance relating to special tests and provisions requirements. The U.S. Department of Housing and Urban Development (HUD) allowed the Project to borrow $9,079 of funds from the reserve for replacements account during fiscal year 2023 to assist in cash operational needs, but the amount borrowed was not repaid to the reserve for replacements account by the former project manager on a timely basis, therefore carrying over to the current fiscal year. Criteria: Uniform Guidance states that controls should be implemented to ensure the Project is in compliance with special tests and provisions. As stated in the regulatory agreement, reserve for replacements funds are only to be utilized for HUD approved purposes. The amount borrowed should have been paid back to the reserve for replacements account in a timely fashion. Questioned Costs: No questioned costs were identified. Context: There was one (1) reserve for replacements withdrawal request to borrow funds from the account to assist with operational cash flows. Effect: Inadequate controls over this area of compliance resulted in the Project not being in compliance with the HUD requirements to repay the borrowed funds. Cause: Management overlooked paying back the amounts borrowed from the reserve for replacements account in a timely fashion. Recommendation: We recommend management review their processes and controls surrounding all deposits and withdrawals from the reserve for replacements account to ensure the Project is meeting the requirements of HUD. Management's Response: Current management contends that these funds should have been repaid to the replacements reserve in fiscal year 2023 as operating cash was replenished and that due to the transition of project managers during fiscal 2024, this yet unpaid amount was overlooked and has been corrected as of September 13, 2024.
Finding 2024-001
Agency: U.S. Department of Housing and Urban Development Federal Assistance Listing Number: 14.155 Federal Program: Mortgage insurance for the purchase or refinancing of existing multifamily housing projects Statement of Condition: The Project did not have adequate and effective controls over compliance relating to special tests and provisions requirements. The U.S. Department of Housing and Urban Development (HUD) allowed the Project to borrow $9,079 of funds from the reserve for replacements account during fiscal year 2023 to assist in cash operational needs, but the amount borrowed was not repaid to the reserve for replacements account by the former project manager on a timely basis, therefore carrying over to the current fiscal year. Criteria: Uniform Guidance states that controls should be implemented to ensure the Project is in compliance with special tests and provisions. As stated in the regulatory agreement, reserve for replacements funds are only to be utilized for HUD approved purposes. The amount borrowed should have been paid back to the reserve for replacements account in a timely fashion. Questioned Costs: No questioned costs were identified. Context: There was one (1) reserve for replacements withdrawal request to borrow funds from the account to assist with operational cash flows. Effect: Inadequate controls over this area of compliance resulted in the Project not being in compliance with the HUD requirements to repay the borrowed funds. Cause: Management overlooked paying back the amounts borrowed from the reserve for replacements account in a timely fashion. Recommendation: We recommend management review their processes and controls surrounding all deposits and withdrawals from the reserve for replacements account to ensure the Project is meeting the requirements of HUD. Management's Response: Current management contends that these funds should have been repaid to the replacements reserve in fiscal year 2023 as operating cash was replenished and that due to the transition of project managers during fiscal 2024, this yet unpaid amount was overlooked and has been corrected as of September 13, 2024.