Audit 341951

FY End
2024-06-30
Total Expended
$2.98M
Findings
2
Programs
3
Year: 2024 Accepted: 2025-02-11

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
522666 2024-001 Significant Deficiency - A
1099108 2024-001 Significant Deficiency - A

Contacts

Name Title Type
M8UTFNBQDNY5 Michael Willis Auditee
3866585450 Chad D. Kunze, CPA 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, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The above schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Dowling Park Apartments, Inc. under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of 2 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 Dowling Park Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of The Dowling Park Apartments, 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, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 3 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Dowling Park Apartments, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The mortgage was executed on November 1, 2008. The outstanding balance as of June 30, 2024 was $2,095,341. Additional disclosure regarding the Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects is noted in Note 6 of the notes to the financial statements.

Finding Details

Section II – Financial Statement Findings Our audit did not disclose any matters required to be reported in accordance with Government Auditing Standards. Section III – Findings and Questioned Costs – Major Federal Programs Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 223(d) Mortgage Insurance for the Purchase or Refinance of Existing Multifamily Housing Projects Assistance Listing Number: 14.155 Federal Award Identification Number and Year: 41-0746749-2024 Award Period: June 12, 2014 through June 12, 2034 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirements: The Regulatory Agreement requires the Project to maintain and expend pre-funded monies on HUD pre-approved expenditures. Condition: The Project expended HUD pre-approved monies on HUD related operational expenditures. This resulted in insufficient funds within the reserve account to expend on the specific HUD pre-approved project as of June 30, 2024. Questioned Costs: $104,000 Context: During our testing, it was noted that the Project erroneously expended pre-funded replacement reserves on HUD operational related expenditures. The pre-funded replacement reserves were not within the reserves escrow as of year-end and the pre-approved capital project had not been started as of June 30, 2024. Cause: Management oversight. Effect: This resulted in insufficient funds within the replacement reserve escrow account to cover the HUD approved withdrawal application as of June 30, 2024. Repeat Finding: This is not a repeat finding. Recommendation: Recommend Project Management reviews its internal control policies over the recording of transactions to ensure that all transactions are used for their intended purpose. Management’s Response: Management agreed that funds were erroneously used for HUD related operational expenditures and were replenished to the reserve account when the error was discovered by accounting staff. Procedures were changed to include all accounting personnel in communications regarding reserve funded projects. Status: Resolved as of August 2024.
Section II – Financial Statement Findings Our audit did not disclose any matters required to be reported in accordance with Government Auditing Standards. Section III – Findings and Questioned Costs – Major Federal Programs Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 223(d) Mortgage Insurance for the Purchase or Refinance of Existing Multifamily Housing Projects Assistance Listing Number: 14.155 Federal Award Identification Number and Year: 41-0746749-2024 Award Period: June 12, 2014 through June 12, 2034 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirements: The Regulatory Agreement requires the Project to maintain and expend pre-funded monies on HUD pre-approved expenditures. Condition: The Project expended HUD pre-approved monies on HUD related operational expenditures. This resulted in insufficient funds within the reserve account to expend on the specific HUD pre-approved project as of June 30, 2024. Questioned Costs: $104,000 Context: During our testing, it was noted that the Project erroneously expended pre-funded replacement reserves on HUD operational related expenditures. The pre-funded replacement reserves were not within the reserves escrow as of year-end and the pre-approved capital project had not been started as of June 30, 2024. Cause: Management oversight. Effect: This resulted in insufficient funds within the replacement reserve escrow account to cover the HUD approved withdrawal application as of June 30, 2024. Repeat Finding: This is not a repeat finding. Recommendation: Recommend Project Management reviews its internal control policies over the recording of transactions to ensure that all transactions are used for their intended purpose. Management’s Response: Management agreed that funds were erroneously used for HUD related operational expenditures and were replenished to the reserve account when the error was discovered by accounting staff. Procedures were changed to include all accounting personnel in communications regarding reserve funded projects. Status: Resolved as of August 2024.