Audit 335585

FY End
2024-06-30
Total Expended
$2.05M
Findings
4
Programs
1
Organization: Webb Park, Inc. (MS)
Year: 2024 Accepted: 2025-01-02

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
517574 2024-001 Significant Deficiency - N
517575 2024-002 Significant Deficiency - N
1094016 2024-001 Significant Deficiency - N
1094017 2024-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $2.05M Yes 2

Contacts

Name Title Type
FUZDB1XHUE78 Gregory K. Crapo Auditee
2287600239 Bill Ishee 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. Webb Park, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: All costs charged to the federal programs were direct costs. The accompanying schedule of expenditures of federal awards include the federal award activity of Webb Park, Inc., HUD Project No. 065-HD019-CA, under programs of the federal government of 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 Webb Park, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Webb Park, Inc.
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. Webb Park, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: All costs charged to the federal programs were direct costs. 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. Webb Park, Inc. has elected not 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 CAPITAL ADVANCE 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. Webb Park, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: All costs charged to the federal programs were direct costs. Webb Park, Inc. has received a U.S. Department of Housing and Urban Development Capital Advance under Section 811 of the National Housing Act. The Capital Advance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Webb Park, Inc. received no additional advances during the year. The balance of the advance outstanding at June 30, 2024 consists of: See the Notes to the SEFA for chart/table.

Finding Details

Finding 2024-001 – Special Tests and Provisions: Criteria In accordance with the Uniform Guidance, an amount as required by HUD will be deposited monthly in the replacement reserve account. Condition During the year ended June 30, 2024, the project only made 11 monthly deposits into the replacement reserve account. Effect The required monthly deposits were not made properly. Cause The project only made 11 monthly deposits into the replacement reserve account. Questioned Costs $1,100 Context The project did not make all 12 monthly deposits into the replacement reserve account. Repeat Finding No Recommendation Management should ensure the procedures to make the required monthly deposits into the replacement reserve account are followed. Auditor Noncompliance Code N – Reserve for Replacements Deposits; Special Tests and Provisions – Replacement Reserve. Finding Resolution Status Open. Reporting Views of Responsible Officials Management will ensure the project makes the delinquent deposit into the replacement reserve account. Management will also ensure the procedures to make the required monthly deposits into the replacement reserve account are followed.
Finding 2024-002 – Special Tests and Provisions: Criteria In accordance with chapter 2.14 of HUD Handbook 4381.5, each project must have fidelity bond or employee dishonesty coverage for at least the value of two months’ gross potential income for the project. If the bond covers more than one project, this minimum must be computed using the project with the highest gross potential income. Condition For the year ended June 30, 2024, the project’s fidelity bond coverage was underfunded in the amount of $56,000. On August 16, 2024, management agent made policy changes to increase fidelity bond/employee dishonesty coverage to meet the minimum coverage requirements prescribed by HUD. Effect For the year ended June 30, 2024, the project’s fidelity bond coverage was insufficient. Cause The project’s fidelity bond coverage was underfunded by $56,000. Questioned Costs $56,000. Context The project’s fidelity bond coverage was not in compliance with HUD rules and regulations. Repeat Finding No. Recommendation Management should ensure fidelity bond coverage for the project meets the minimum requirements prescribed by HUD. Auditor Noncompliance Code Z – Other; Special Tests and Provisions –Management Functions. Finding Resolution Status Resolved. Reporting Views of Responsible Officials. Management will ensure that fidelity bond coverage is in accordance with HUD rules and regulations.
Finding 2024-001 – Special Tests and Provisions: Criteria In accordance with the Uniform Guidance, an amount as required by HUD will be deposited monthly in the replacement reserve account. Condition During the year ended June 30, 2024, the project only made 11 monthly deposits into the replacement reserve account. Effect The required monthly deposits were not made properly. Cause The project only made 11 monthly deposits into the replacement reserve account. Questioned Costs $1,100 Context The project did not make all 12 monthly deposits into the replacement reserve account. Repeat Finding No Recommendation Management should ensure the procedures to make the required monthly deposits into the replacement reserve account are followed. Auditor Noncompliance Code N – Reserve for Replacements Deposits; Special Tests and Provisions – Replacement Reserve. Finding Resolution Status Open. Reporting Views of Responsible Officials Management will ensure the project makes the delinquent deposit into the replacement reserve account. Management will also ensure the procedures to make the required monthly deposits into the replacement reserve account are followed.
Finding 2024-002 – Special Tests and Provisions: Criteria In accordance with chapter 2.14 of HUD Handbook 4381.5, each project must have fidelity bond or employee dishonesty coverage for at least the value of two months’ gross potential income for the project. If the bond covers more than one project, this minimum must be computed using the project with the highest gross potential income. Condition For the year ended June 30, 2024, the project’s fidelity bond coverage was underfunded in the amount of $56,000. On August 16, 2024, management agent made policy changes to increase fidelity bond/employee dishonesty coverage to meet the minimum coverage requirements prescribed by HUD. Effect For the year ended June 30, 2024, the project’s fidelity bond coverage was insufficient. Cause The project’s fidelity bond coverage was underfunded by $56,000. Questioned Costs $56,000. Context The project’s fidelity bond coverage was not in compliance with HUD rules and regulations. Repeat Finding No. Recommendation Management should ensure fidelity bond coverage for the project meets the minimum requirements prescribed by HUD. Auditor Noncompliance Code Z – Other; Special Tests and Provisions –Management Functions. Finding Resolution Status Resolved. Reporting Views of Responsible Officials. Management will ensure that fidelity bond coverage is in accordance with HUD rules and regulations.