Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements, a mandated amount is required to be deposited into the R4R account each month. The entity did not increase their monthly deposit accordingly.
Condition: During our testing, we noted that Brook View Gardens, Inc. failed to make the correct monthly deposits into the Replacement for Reserve account resulting in underfunding of $7,000.
Questioned costs: None
Context: During our testing we noted that the most recent increase to the required monthly deposit had never been implemented.
Cause: The deposit increase was not adjusted due to an oversight.
Effect: Replacement Reserve is underfunded and not in compliance with HUD.
Section III – Federal Award Findings, Questioned Costs, and Recommendations (Continued)
2024 – 002 (Continued)
Repeat Finding: No
Recommendation: CLA recommends performing training regarding HUD requirements surrounding Replacement Reserve Provisions and introduce policies and procedures to prevent oversight of deposit changes. We also recommend the amount of $7,000 be deposited immediately into the Replacement for Reserve Account.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements, a mandated amount is required to be deposited into the R4R account each month. The entity did not increase their monthly deposit accordingly.
Condition: During our testing, we noted that Brook View Gardens, Inc. failed to make the correct monthly deposits into the Replacement for Reserve account resulting in underfunding of $7,000.
Questioned costs: None
Context: During our testing we noted that the most recent increase to the required monthly deposit had never been implemented.
Cause: The deposit increase was not adjusted due to an oversight.
Effect: Replacement Reserve is underfunded and not in compliance with HUD.
Section III – Federal Award Findings, Questioned Costs, and Recommendations (Continued)
2024 – 002 (Continued)
Repeat Finding: No
Recommendation: CLA recommends performing training regarding HUD requirements surrounding Replacement Reserve Provisions and introduce policies and procedures to prevent oversight of deposit changes. We also recommend the amount of $7,000 be deposited immediately into the Replacement for Reserve Account.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2022 to June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to make the required deposit of surplus cash that was calculated in the 2023 audited financial statements.
Questioned costs: None
Context: During our testing we noted that there had been no deposits made into the residual receipts account.
Cause: Brook View Gardens had a change in personnel in February 2024 in the accounting department and the deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2022 to June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to make the required deposit of surplus cash that was calculated in the 2023 audited financial statements.
Questioned costs: None
Context: During our testing we noted that there had been no deposits made into the residual receipts account.
Cause: Brook View Gardens had a change in personnel in February 2024 in the accounting department and the deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to calculate and remit the surplus cash deposit that would have been due by August 31, 2024.
Questioned costs: None
Context: During our testing we noted that there had been no deposits calculated at year end or made into the residual receipts account for the 2024 year.
Cause: The deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to calculate and remit the surplus cash deposit that would have been due by August 31, 2024.
Questioned costs: None
Context: During our testing we noted that there had been no deposits calculated at year end or made into the residual receipts account for the 2024 year.
Cause: The deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project. The Regulatory Agreement states the borrower shall not incur any liability or obligation not in connection with the project.
Condition: During our audit, we noted that Brook View Gardens made payments on behalf of other projects.
Questioned costs: None
Context: During the audit we determined that there is a shared insurance policy for 4 projects sponsored by Preferred Properties that Brook View Gardens paid premiums for and was not reimbursed for these payments. In addition, see finding 2024-004 for detail regarding a separate vouchering issue.
Cause: The amounts were vouchered and not reimbursed due to oversight.
Effect: Project is out of compliance with regulatory agreement and Allowable Cost Provisions.
Repeat Finding: No
Recommendation: Performing training regarding HUD requirements surrounding Allowable Cost Provision and to collect reimbursement for unallowable costs immediately.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project. The Regulatory Agreement states the borrower shall not incur any liability or obligation not in connection with the project.
Condition: During our audit, we noted that Brook View Gardens made payments on behalf of other projects.
Questioned costs: None
Context: During the audit we determined that there is a shared insurance policy for 4 projects sponsored by Preferred Properties that Brook View Gardens paid premiums for and was not reimbursed for these payments. In addition, see finding 2024-004 for detail regarding a separate vouchering issue.
Cause: The amounts were vouchered and not reimbursed due to oversight.
Effect: Project is out of compliance with regulatory agreement and Allowable Cost Provisions.
Repeat Finding: No
Recommendation: Performing training regarding HUD requirements surrounding Allowable Cost Provision and to collect reimbursement for unallowable costs immediately.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements, a mandated amount is required to be deposited into the R4R account each month. The entity did not increase their monthly deposit accordingly.
Condition: During our testing, we noted that Brook View Gardens, Inc. failed to make the correct monthly deposits into the Replacement for Reserve account resulting in underfunding of $7,000.
Questioned costs: None
Context: During our testing we noted that the most recent increase to the required monthly deposit had never been implemented.
Cause: The deposit increase was not adjusted due to an oversight.
Effect: Replacement Reserve is underfunded and not in compliance with HUD.
Section III – Federal Award Findings, Questioned Costs, and Recommendations (Continued)
2024 – 002 (Continued)
Repeat Finding: No
Recommendation: CLA recommends performing training regarding HUD requirements surrounding Replacement Reserve Provisions and introduce policies and procedures to prevent oversight of deposit changes. We also recommend the amount of $7,000 be deposited immediately into the Replacement for Reserve Account.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements, a mandated amount is required to be deposited into the R4R account each month. The entity did not increase their monthly deposit accordingly.
Condition: During our testing, we noted that Brook View Gardens, Inc. failed to make the correct monthly deposits into the Replacement for Reserve account resulting in underfunding of $7,000.
Questioned costs: None
Context: During our testing we noted that the most recent increase to the required monthly deposit had never been implemented.
Cause: The deposit increase was not adjusted due to an oversight.
Effect: Replacement Reserve is underfunded and not in compliance with HUD.
Section III – Federal Award Findings, Questioned Costs, and Recommendations (Continued)
2024 – 002 (Continued)
Repeat Finding: No
Recommendation: CLA recommends performing training regarding HUD requirements surrounding Replacement Reserve Provisions and introduce policies and procedures to prevent oversight of deposit changes. We also recommend the amount of $7,000 be deposited immediately into the Replacement for Reserve Account.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2022 to June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to make the required deposit of surplus cash that was calculated in the 2023 audited financial statements.
Questioned costs: None
Context: During our testing we noted that there had been no deposits made into the residual receipts account.
Cause: Brook View Gardens had a change in personnel in February 2024 in the accounting department and the deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2022 to June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to make the required deposit of surplus cash that was calculated in the 2023 audited financial statements.
Questioned costs: None
Context: During our testing we noted that there had been no deposits made into the residual receipts account.
Cause: Brook View Gardens had a change in personnel in February 2024 in the accounting department and the deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to calculate and remit the surplus cash deposit that would have been due by August 31, 2024.
Questioned costs: None
Context: During our testing we noted that there had been no deposits calculated at year end or made into the residual receipts account for the 2024 year.
Cause: The deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements Surplus Cash calculated in the prior year must be deposited into a separate residual receipts account within 60 days of year end.
Condition: During our testing, we noted that Brook View Gardens failed to calculate and remit the surplus cash deposit that would have been due by August 31, 2024.
Questioned costs: None
Context: During our testing we noted that there had been no deposits calculated at year end or made into the residual receipts account for the 2024 year.
Cause: The deposit was missed due to oversight.
Effect: The residual receipts account is not in compliance with HUD Residual Receipts Provisions and is underfunded.
Repeat Finding: No
Recommendation: We recommend Brook View Gardens design and implement controls to ensure the deposit of surplus cash is made when required. We also recommend the current year surplus cash amount of $10,079 calculated at June 30, 2024 be deposited immediately
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project. The Regulatory Agreement states the borrower shall not incur any liability or obligation not in connection with the project.
Condition: During our audit, we noted that Brook View Gardens made payments on behalf of other projects.
Questioned costs: None
Context: During the audit we determined that there is a shared insurance policy for 4 projects sponsored by Preferred Properties that Brook View Gardens paid premiums for and was not reimbursed for these payments. In addition, see finding 2024-004 for detail regarding a separate vouchering issue.
Cause: The amounts were vouchered and not reimbursed due to oversight.
Effect: Project is out of compliance with regulatory agreement and Allowable Cost Provisions.
Repeat Finding: No
Recommendation: Performing training regarding HUD requirements surrounding Allowable Cost Provision and to collect reimbursement for unallowable costs immediately.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project. The Regulatory Agreement states the borrower shall not incur any liability or obligation not in connection with the project.
Condition: During our audit, we noted that Brook View Gardens made payments on behalf of other projects.
Questioned costs: None
Context: During the audit we determined that there is a shared insurance policy for 4 projects sponsored by Preferred Properties that Brook View Gardens paid premiums for and was not reimbursed for these payments. In addition, see finding 2024-004 for detail regarding a separate vouchering issue.
Cause: The amounts were vouchered and not reimbursed due to oversight.
Effect: Project is out of compliance with regulatory agreement and Allowable Cost Provisions.
Repeat Finding: No
Recommendation: Performing training regarding HUD requirements surrounding Allowable Cost Provision and to collect reimbursement for unallowable costs immediately.
Views of responsible officials: There is no disagreement with the audit finding.