Audit 341738

FY End

2024-06-30

Total Expended

$1.59M

Findings

2

Programs

2

Organization: Marysville Quilceda Meadows (WA)

Year: 2024 Accepted: 2025-02-08

Auditor: Squires Maddux & Company PLLC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
522475	2024-001	-	-	N
1098917	2024-001	-	-	N

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$1.18M	Yes	1
14.239	Home Investment Partnerships Program	$58,543	Yes	0

Contacts

Name	Title	Type
RWZPWLHLS664	Mary Manning	Auditee
3603914329	John Maddux	Auditor
No contacts on file

Notes to SEFA

Title: NOTE A - BASIS OF PRESENTATION Accounting Policies: NOTE A - BASIS OF PRESENTATION The above schedule of expenditures of federal awards includes the federal grant activity of Marysville Quilceda Meadows, HUD Project No. 127-HD025 and 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); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Marysville Quilceda Meadows, it is not intended to and does not present the financial position, change in net assets, or cash flows of Marysville Quilceda Meadows. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule 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: Marysville Quiilceda Meadows elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform The above schedule of expenditures of federal awards includes the federal grant activity of Marysville Quilceda Meadows, HUD Project No. 127-HD025 and 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); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Marysville Quilceda Meadows, it is not intended to and does not present the financial position, change in net assets, or cash flows of Marysville Quilceda Meadows.

Title: NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: NOTE A - BASIS OF PRESENTATION The above schedule of expenditures of federal awards includes the federal grant activity of Marysville Quilceda Meadows, HUD Project No. 127-HD025 and 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); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Marysville Quilceda Meadows, it is not intended to and does not present the financial position, change in net assets, or cash flows of Marysville Quilceda Meadows. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule 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: Marysville Quiilceda Meadows elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Expenditures reported on the Schedule 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. Marysville Quilceda Meadows has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance.

Title: NOTE C - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAMS Accounting Policies: NOTE A - BASIS OF PRESENTATION The above schedule of expenditures of federal awards includes the federal grant activity of Marysville Quilceda Meadows, HUD Project No. 127-HD025 and 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); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Marysville Quilceda Meadows, it is not intended to and does not present the financial position, change in net assets, or cash flows of Marysville Quilceda Meadows. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule 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: Marysville Quiilceda Meadows elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Marysville Quilceda Meadows has received a U.S. Department of Housing and Urban Development capital advance pursuant to Section 811, of the National Housing Act, and loans pursuant to the HOME Investment Partnerships Program. The capital advance and HOME loans outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Marysville Quilceda Meadows received no additional capital advance or loan proceeds during the year. The balance of the capital advance and loan outstanding at June 30, 2022 consisted of: 14.181 Supportive Housing for Persons with Disabilities - $1,175,948; HOME Investment Partnerships Program Loans - $310,740.

Finding Details

Finding 2024-001

S3800-011 Title and CFDA Number of Federal Program - 14-181 Supportive Housing for Persons With Disabilities S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status - In Process S3800-017 Information on Universe Population Size – Not Applicable S3800-018 Sample Size Information – Not Applicable S3800-019 Identification of Repeat Finding and Finding Reference Number – Not Applicable S3800-020 Criteria: HUD Regulatory Agreement provision requiring establishment and maintenance of a replacement reserve account, which required monthly deposits of $700. That deposit requirement was increased to $741 effective July 1, 2024. S3800-030 Statement of Condition: Management did not make all of the required deposits to the replacement reserve at June 30, 2024. The annual deposits required were $8,892 but only $5,918 was deposited. S3800-030 Cause: Management made bookkeeping entries to make it appear that the transfers had all been made monthly as required, but the actual cash did not get deposited and were listed as in-transit. In addition, some of the deposits were not made during the transition in management. S3800-033 Effect or Potential Effect: Management did not always follow the regulatory agreement with respect to making monthly deposits to the replacement reserve account. S3800-035 Auditor Non-Compliance Code - (N) Replacement Reserve Deposits S3800-040 Questioned Costs - $2,974 S3800-045 Reporting Views of Responsible Officials: Management will design controls to ensure all monthly deposits are made timely. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127-HD025 S3800-038 Questioned Costs - $2,974 S3800-050 Context: The HUD regulatory agreement requires twelve monthly deposits of $741 monthly to be made to a segregated replacement reserve account controlled by the Organization. Management recorded all twelve transfers, but some of the transfers were listed as in-transit on the bank statements and had not actually been made. S3800-080 Recommendation: Management should review policies and procedures to ensure all required deposits to the reserve account are made timely. Management might consider setting up automatic transfers to make the required monthly deposits. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management concurs with the auditor’s recommendation, and will design controls to ensure all required monthly deposits are made timely. S3800-130 Response Indicator – Agree S3800-140 Completion Date – December 20, 2024 S3800-150 Response: Management concurs with the auditor’s recommendation, and will design controls to ensure all required deposits are made to the replacement reserve.

Finding 2024-001

S3800-011 Title and CFDA Number of Federal Program - 14-181 Supportive Housing for Persons With Disabilities S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status - In Process S3800-017 Information on Universe Population Size – Not Applicable S3800-018 Sample Size Information – Not Applicable S3800-019 Identification of Repeat Finding and Finding Reference Number – Not Applicable S3800-020 Criteria: HUD Regulatory Agreement provision requiring establishment and maintenance of a replacement reserve account, which required monthly deposits of $700. That deposit requirement was increased to $741 effective July 1, 2024. S3800-030 Statement of Condition: Management did not make all of the required deposits to the replacement reserve at June 30, 2024. The annual deposits required were $8,892 but only $5,918 was deposited. S3800-030 Cause: Management made bookkeeping entries to make it appear that the transfers had all been made monthly as required, but the actual cash did not get deposited and were listed as in-transit. In addition, some of the deposits were not made during the transition in management. S3800-033 Effect or Potential Effect: Management did not always follow the regulatory agreement with respect to making monthly deposits to the replacement reserve account. S3800-035 Auditor Non-Compliance Code - (N) Replacement Reserve Deposits S3800-040 Questioned Costs - $2,974 S3800-045 Reporting Views of Responsible Officials: Management will design controls to ensure all monthly deposits are made timely. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127-HD025 S3800-038 Questioned Costs - $2,974 S3800-050 Context: The HUD regulatory agreement requires twelve monthly deposits of $741 monthly to be made to a segregated replacement reserve account controlled by the Organization. Management recorded all twelve transfers, but some of the transfers were listed as in-transit on the bank statements and had not actually been made. S3800-080 Recommendation: Management should review policies and procedures to ensure all required deposits to the reserve account are made timely. Management might consider setting up automatic transfers to make the required monthly deposits. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management concurs with the auditor’s recommendation, and will design controls to ensure all required monthly deposits are made timely. S3800-130 Response Indicator – Agree S3800-140 Completion Date – December 20, 2024 S3800-150 Response: Management concurs with the auditor’s recommendation, and will design controls to ensure all required deposits are made to the replacement reserve.