FAC Explorer

Audit 332529

FY End
2022-03-31
Total Expended
$8.39M
Findings
2
Programs
2
Organization: 400-408 Housing Development Fund Company INC (NY)
Year: 2022 Accepted: 2024-12-13
Auditor: Cbiz CPAS PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
514276 2022-004 Significant Deficiency Yes L
1090718 2022-004 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $4.53M Yes 1
14.195 Section 8 Housing Assistance Payments Program $3.85M Yes 0

Contacts

Name Title Type
QCPLA5YNZZT9 Nestor Olivier Auditee
2125630310 Vivian Jin Auditor
No contacts on file

Notes to SEFA

Title: Note 3 - Mortage Accounting Policies: The schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of 400-408 Housing Development Fund Co. Inc. HUD Project No. 012-11298 (the “Company”), and is presented on the accrual basis of accounting, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Company, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Company. De Minimis Rate Used: N Rate Explanation: The Company has elected not to use the ten percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Company has a loan guaranteed by HUD, and the outstanding balance of the loan at March 31, 2022 is $4,431,729. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule.

Finding Details

Finding 2022-004
Condition: The Project failed to deposit the current year’s required surplus cash into its residual receipts account within 90 days of year-end. Additionally, the Project underfunded its residual receipts account by failing to deposit the total current year’s surplus cash amount. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing the total current year surplus cash into a residual receipts account within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in the residual receipts account being underfunded by $587,045. Recommendation: The Company should design their internal controls to ensure the calculation of surplus cash is performed timely, to ensure that they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on August 9, 2022 and July 22, 2024. Prior Year Finding: Yes
Finding 2022-004
Condition: The Project failed to deposit the current year’s required surplus cash into its residual receipts account within 90 days of year-end. Additionally, the Project underfunded its residual receipts account by failing to deposit the total current year’s surplus cash amount. Criteria: The Company is required to follow HUD’s guidelines and procedures for depositing the total current year surplus cash into a residual receipts account within 90 days after the end of the fiscal period. Cause: Internal controls at the Company are not properly designed to ensure timely deposit of surplus cash amounts. Effect: The Company was not in compliance with their Regulatory Agreement. Context: During our recalculation of management’s computation of surplus cash, we noted the residual receipts deposit was based on a preliminary calculation which resulted in the residual receipts account being underfunded by $587,045. Recommendation: The Company should design their internal controls to ensure the calculation of surplus cash is performed timely, to ensure that they will comply with HUD guidelines, as stated above. Reporting Views of Responsible Officials: Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on August 9, 2022 and July 22, 2024. Prior Year Finding: Yes