FAC Explorer

Audit 326539

FY End
2024-06-30
Total Expended
$8.77M
Findings
2
Programs
1
Organization: Terraces Assisted Living INC (MN)
Year: 2024 Accepted: 2024-10-30
Auditor: Mahoney Ulbrich Christiansen & Russ PA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
504118 2024-001 Material Weakness Yes P
1080560 2024-001 Material Weakness Yes P

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $8.77M Yes 1

Contacts

Name Title Type
WDF5AC4H3GG8 Vicky Dwyer Auditee
7633771800 Josh Russell 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, except for the mortgage insurance as discussed below. Federal expenditures for the mortgage insurance program represent the June 30, 2023 balance of an insured mortgage loan outstanding from a previous year for which the grantor imposes continuing compliance requirements. The balance of the loan outstanding as of June 30, 2024 is $8,508,351. De Minimis Rate Used: N Rate Explanation: The Terraces Assisted Living, LLC’s federal award is not based on eligible costs incurred. Accordingly The Terraces Assisted Living, LLC has not made an election related to the use of the 10% de minimis cost rate described in the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of The Terraces Assisted Living, LLC 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 Terraces Assisted Living, LLC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of The Terraces Assisted Living, LLC.

Finding Details

Finding 2024-001
Federal Agency - U.S. Department of Housing and Urban Development Office of Housing - Federal Housing Commissioner Assistance Listing Number 14.129 - Mortgage Insurance - Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities (Section 232) Material Weakness and noncompliance Category of Finding - Unauthorized management fees Criteria - The HUD Regulatory Agreement requires HUD approval for any changes in the management agent of the Project and/or management fees charged to the Project. Condition - The Project signed a new management agreement effective July 1, 2022. The agreement is with a new management company that is wholly owned by the previous management company, and also increases the management fees charged to the Project. These changes have not been approved by HUD. Cause - The Project was required to make the change in management companies due to updated requirements for assisted living facilities required by the State of Minnesota. Management began the process of requesting HUD approval for these changes but did not receive approval from HUD before making the changes. Effect - The Project was not in compliance with the Regulatory Agreement. Identification of Repeat Finding - 2023-001 Questioned Costs - $125,797 Recommendation - Management should ensure that HUD approval is obtained before making any changes in management agent or management fees.
Finding 2024-001
Federal Agency - U.S. Department of Housing and Urban Development Office of Housing - Federal Housing Commissioner Assistance Listing Number 14.129 - Mortgage Insurance - Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities (Section 232) Material Weakness and noncompliance Category of Finding - Unauthorized management fees Criteria - The HUD Regulatory Agreement requires HUD approval for any changes in the management agent of the Project and/or management fees charged to the Project. Condition - The Project signed a new management agreement effective July 1, 2022. The agreement is with a new management company that is wholly owned by the previous management company, and also increases the management fees charged to the Project. These changes have not been approved by HUD. Cause - The Project was required to make the change in management companies due to updated requirements for assisted living facilities required by the State of Minnesota. Management began the process of requesting HUD approval for these changes but did not receive approval from HUD before making the changes. Effect - The Project was not in compliance with the Regulatory Agreement. Identification of Repeat Finding - 2023-001 Questioned Costs - $125,797 Recommendation - Management should ensure that HUD approval is obtained before making any changes in management agent or management fees.