Audit 329678

FY End
2023-09-30
Total Expended
$4.35M
Findings
2
Programs
2
Year: 2023 Accepted: 2024-11-24
Auditor: Bert Smith & CO

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
511959 2023-001 Significant Deficiency - N
1088401 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $3.73M Yes 1
14.U14 Project Rental Assistance Contract $622,875 - 0

Contacts

Name Title Type
C2H8FPKWKYH3 Junia John-Straker Auditee
3407724099 Keisha Bridgewater Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 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: The Project has not elected 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 grant activity of St. Thomas-St. John Division of Lutheran Housing Association for the Elderly of the Virgin Islands, Inc. – Ebenezer Gardens Apartments (Ebenezer Gardens Apartments), Project Number 056-EE-001, under programs of the federal government for the year ended September 30, 2023. The information in this Schedule is presented in accordance with the requirements 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 Ebenezer Gardens Apartments, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Ebenezer Gardens Apartments.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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: The Project has not elected to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance. 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. The Project has not elected to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 3 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM 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: The Project has not elected to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance. Ebenezer Garden Apartments has received a U.S. Department of Housing and Urban Development Capital Advance under Section 202 of the National Housing Act. The capital advance balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Ebenezer Gardens Apartments received no additional advances during the year. The balance of the capital advance outstanding at September 30, 2023 consists of: ALN 14.157 Program - Section 202 Direct Loan Balance - $3,727,800

Finding Details

Finding Number: 2023-001 Federal Agency: U.S. Department of Housing and Urban Development ALN: 14.157 Compliance Requirement: Special Test and Provisions – Use of Project Funds-Payroll Activities Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, salaries and wages charged to Federal awards are subject to the standards of documentation as described by 2 CFR Section 200.430(i) and must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records: • Reasonable reflects the total activity for which the employee is compensated across all grant-related and non-grant-related activities (100% effort) and • Support the distribution of employee salary across multiple activities or cost objectives. Condition – For ALN 14.157, we sampled and selected 25 out of 173 payroll expenditures and noted six (6) instances where timesheets were not available for review. Questioned Cost – $9,172 Context – This is a condition identified per review of The Project’s compliance with the specified requirements using a statistically valid sample. The total payroll expenditure charged to the program in fiscal year 2023 is $203,516. The total amount sampled is $24,219. The known amount of the exceptions is $9,172. Effect – The Project is not in compliance with he stated provision. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – Timesheets appear to have been misfiled and were not available for review upon request. Recommendation – Management should ensure timesheets are properly filed and be available for review upon request. Views of Responsible Officials – Timesheets were misfiled by a new employee responsible for sorting and filing timesheets. Several employee folders were searched for misplaced timesheets, and some were found; However, the six missing timesheets were not found. This program is physically located in St. Thomas, and the original timesheets arrive at the administrative office about a week after the payroll is processed. A faxed copy of the original timesheets is used for review before processing payroll. Going forward, time sheet sorting and filing by new employees will be monitored more closely for proper sorting and filing
Finding Number: 2023-001 Federal Agency: U.S. Department of Housing and Urban Development ALN: 14.157 Compliance Requirement: Special Test and Provisions – Use of Project Funds-Payroll Activities Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, salaries and wages charged to Federal awards are subject to the standards of documentation as described by 2 CFR Section 200.430(i) and must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records: • Reasonable reflects the total activity for which the employee is compensated across all grant-related and non-grant-related activities (100% effort) and • Support the distribution of employee salary across multiple activities or cost objectives. Condition – For ALN 14.157, we sampled and selected 25 out of 173 payroll expenditures and noted six (6) instances where timesheets were not available for review. Questioned Cost – $9,172 Context – This is a condition identified per review of The Project’s compliance with the specified requirements using a statistically valid sample. The total payroll expenditure charged to the program in fiscal year 2023 is $203,516. The total amount sampled is $24,219. The known amount of the exceptions is $9,172. Effect – The Project is not in compliance with he stated provision. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – Timesheets appear to have been misfiled and were not available for review upon request. Recommendation – Management should ensure timesheets are properly filed and be available for review upon request. Views of Responsible Officials – Timesheets were misfiled by a new employee responsible for sorting and filing timesheets. Several employee folders were searched for misplaced timesheets, and some were found; However, the six missing timesheets were not found. This program is physically located in St. Thomas, and the original timesheets arrive at the administrative office about a week after the payroll is processed. A faxed copy of the original timesheets is used for review before processing payroll. Going forward, time sheet sorting and filing by new employees will be monitored more closely for proper sorting and filing