Audit 345143

FY End

2024-06-30

Total Expended

$950,105

Findings

4

Programs

1

Organization: South Metro Homes, Inc. (GA)

Year: 2024 Accepted: 2025-03-07

Auditor: Blad & Hezlep LLC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
525999	2024-001	Significant Deficiency	Yes	E
526000	2024-002	Significant Deficiency	-	C
1102441	2024-001	Significant Deficiency	Yes	E
1102442	2024-002	Significant Deficiency	-	C

ALN	Program	Spent	Major	Findings
14.181	Supportive Housing for Persons with Disabilities	$33,705	Yes	0

Contacts

Name	Title	Type
LRKEUQR5PA15	Cristy Campbell	Auditee
4705756513	Adam Hezlep	Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of South Metro Homes, Inc. HUD Project NO. 061-HD013-WDD under programs of the Federal government for the year ended June 30, 2024. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Accounting Principles Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 5 to the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of South Metro Homes, Inc. HUD Project NO. 061-HD013-WDD under programs of the Federal government for the year ended June 30, 2024. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.

Title: Accounting Principles Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of South Metro Homes, Inc. HUD Project NO. 061-HD013-WDD under programs of the Federal government for the year ended June 30, 2024. The information in this schedule is presented in accordance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Accounting Principles Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 5 to the financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost accounting principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Capital Advance is described in Note 5 to the financial statements.

Finding Details

Finding 2024-001

2024-001 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provide signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.

Finding 2024-002

2024-002 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance – CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2024. The Organization has not deposited the required reserve amount as of June 30, 2024. Cause: The Organization did not make the required replacement reserve account deposits prior to June 30, 2024. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2024, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD’s rules. Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Metro Homes, Inc. concurs with the recommendation. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $3,012 deposit in the year ended June 30, 2025.

Finding 2024-001

2024-001 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provide signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.

Finding 2024-002

2024-002 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance – CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2024. The Organization has not deposited the required reserve amount as of June 30, 2024. Cause: The Organization did not make the required replacement reserve account deposits prior to June 30, 2024. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2024, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD’s rules. Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Metro Homes, Inc. concurs with the recommendation. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $3,012 deposit in the year ended June 30, 2025.