FAC Explorer

Audit 338779

FY End
2024-09-30
Total Expended
$6.40M
Findings
4
Programs
1
Organization: The Pavilion Housing Development Fund Corporation (NY)
Year: 2024 Accepted: 2025-01-17
Auditor: Withumsmith+brown PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
519699 2024-001 Significant Deficiency Yes N
519700 2024-002 Significant Deficiency - N
1096141 2024-001 Significant Deficiency Yes N
1096142 2024-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $555,187 Yes 2

Contacts

Name Title Type
KTV2HWLCJE16 Heng Ly Auditee
7183673200 James Huang Auditor
No contacts on file

Notes to SEFA

Title: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CAPITAL ADVANCE (SECTION 202) Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards (“the Schedule”) presents the activities in all federal awards of The Pavilion Housing Development Fund Corporation. All financial assistance received directly from federal agencies as well as financial assistance passed through other governmental agencies or non-profit organizations are included on the Schedule. 2. BASIS OF ACCOUNTING The Schedule is presented using the accrual basis of accounting. The amounts reported in the Schedule may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either cash or a modified cash basis of accounting. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Federal expenditures are reported on the statement of activities as operating costs before depreciation. The expenditures reported in the basic financial statements may differ from the expenditures reported in the Schedule due to program expenditures exceeding grant or contract budget limitations or agency matching or in-kind contributions which are not included as federal awards. 4. BASIS OF PRESENTATION The accompanying Schedule includes the federal award activity of The Pavilion Housing Development Fund Corporation under programs of the federal government for the year ended September 30, 2024. 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 Pavilion Housing Development Fund Corporation, it is not intended and does not present the financial position, changes in net assets (deficit), or cash flows of The Pavilion Housing Development Fund Corporation. 5. SUBRECIPIENTS The non-profit Organization provided no federal awards to sub recipients for the year ended September 30, 2024. 6. INDIRECT COSTS The non-profit Organization does not have a federally negotiated indirect cost rate and has not elected to use the 10% de minimis rate as covered in section 200.414 in the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The non-profit Organization has received financing for the Project consisting of a capital advance in the amount of $5,840,900 from the United States Department of Housing and Urban Development (“HUD”). The advance is subject to HUD compliance requirements and will be forgiven in 2045 if all requirements are met. The balance of the capital advance at September 30, 2024 is $5,840,900.

Finding Details

Finding 2024-001
Criteria The non-profit Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the non-profit Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2024, required monthly deposits of $24,952 were to be funded into the replacement reserve account, and $6,237 was funded. Condition The non-profit Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow, management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the non-profit Organization did not make all required deposits in the current year. Effect The non-profit Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2023-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Finding 2024-002
Criteria In accordance with 24 CFR 891.400(e), a separate interest-bearing project fund account shall be maintained in a depository or depositories which are members of the Federal Deposit Insurance Corporation or National Credit Union Share Insurance Fund and all tenant payments, charges, income and revenues arising from project operation or ownership shall be deposited to this account. Condition The project fund account used by the non-profit Organization was not an interest-bearing account. Cause Subsequent to the initial rental assistance contract, changes to HUD regulations resulted in the requirement that the project fund account be an interest-bearing account. This change was an oversight by the non-profit Organization’s management. Questioned Costs None noted. Context When performing our audit, we noted that the project fund account used by the non-profit Organization was not an interest-bearing account. Effect Project funds would not earn interest in accordance with HUD requirements. Recommendation We recommend that the non-profit Organization utilize an interest-bearing account for project funds in accordance with HUD requirements. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Although the non-profit Organization does not currently use an interest-bearing account for project funds, due to the ongoing operation of the program and continuous activity within the project funds account, any interest earned in such an account would be negligible. Management is in the process of evaluating this recommendation to determine the appropriate course of action.
Finding 2024-001
Criteria The non-profit Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the non-profit Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2024, required monthly deposits of $24,952 were to be funded into the replacement reserve account, and $6,237 was funded. Condition The non-profit Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow, management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the non-profit Organization did not make all required deposits in the current year. Effect The non-profit Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2023-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Finding 2024-002
Criteria In accordance with 24 CFR 891.400(e), a separate interest-bearing project fund account shall be maintained in a depository or depositories which are members of the Federal Deposit Insurance Corporation or National Credit Union Share Insurance Fund and all tenant payments, charges, income and revenues arising from project operation or ownership shall be deposited to this account. Condition The project fund account used by the non-profit Organization was not an interest-bearing account. Cause Subsequent to the initial rental assistance contract, changes to HUD regulations resulted in the requirement that the project fund account be an interest-bearing account. This change was an oversight by the non-profit Organization’s management. Questioned Costs None noted. Context When performing our audit, we noted that the project fund account used by the non-profit Organization was not an interest-bearing account. Effect Project funds would not earn interest in accordance with HUD requirements. Recommendation We recommend that the non-profit Organization utilize an interest-bearing account for project funds in accordance with HUD requirements. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Although the non-profit Organization does not currently use an interest-bearing account for project funds, due to the ongoing operation of the program and continuous activity within the project funds account, any interest earned in such an account would be negligible. Management is in the process of evaluating this recommendation to determine the appropriate course of action.