FAC Explorer

Audit 35137

FY End
2022-12-31
Total Expended
$1.91M
Findings
4
Programs
1
Organization: Asi - Jackson County, Inc. (MN)
Year: 2022 Accepted: 2023-05-09
Auditor: Bjorklund & Montplaisir

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
36763 2022-001 Material Weakness - N
36764 2022-002 Material Weakness - N
613205 2022-001 Material Weakness - N
613206 2022-002 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $1.91M Yes 2

Contacts

Name Title Type
RVM8KVZFKEG4 Chuck Reuter Auditee
6416457271 Misol Kim Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES (14.181) - Balances outstanding at the end of the audit period were 1843500.
Title: 1.BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 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) includes the federal award activity of ASI - Jackson County, Inc. (the Company) and is presented on the accrual basis of accounting. The information in this schedule 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 (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Company, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Company.
Title: 3.U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Company has received a loan funded by programs of U.S. Department of Housing and Urban Development. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Such balance has been included as net assets in the financial statements of the Company as of December 31, 2022 since the likelihood of repayment is remote. The Company received no additional loans during the year ended December 31, 2022. The balance of the loan outstanding at December 31, 2022 is as follows:CFDA NumberProgram NameOutstanding Balance14.181Supportive Housing for Persons with Disabilities (Section 811)$ 1,843,500

Finding Details

Finding 2022-001
Type of Finding ? Financial Statements and Federal Award Finding Finding Resolution Status ? In progress Criteria or Specific Condition ? The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition ? Annual recertification of existing tenants were not completed due to lack of staffing since April 2022 until February 2023. While the property management company submitted monthly vouchers based on the previous certification, HUD discontinued the subsidy payments since July 2022. At December 31, 2022, the subsidy receivable balance was $24,146. Cause ? The annual recertification was not done due to lack of staffing at the property management company. Effect or Potential Effect ? The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code ? Z ? Eligibility Questioned Costs ? $24,146 Reporting View of Responsible Officials ? We concur with the auditor?s recommendation. Recommendation ? The Project should complete the recertification process for the remaining tenants. Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations ? Agree Response Indicator ? Agree Completion Date ? June 30, 2023 Response ? In February 2023, Cascade Management hired a compliance specialist and resumed the recertification processes. The recertifications for 16 of 22 units have been submitted as of April 19, 2023. Four units became vacant and the management is unable to complete the recertification. The subsidies previously requested for the period without the recertification have been adjusted in the accounting records and will be adjusted on HAP vouchers in May 2023. The remaining two recertifications are in process. The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.
Finding 2022-002
Finding No. 2022-002 ? Section 811 ? CFDA No. 14.181 Type of Finding ? Federal Award Finding Finding Resolution Status ? In progress Criteria or Specific Condition ? The Regulatory Agreement requires the Company to make monthly deposits of $654 to the reserve for replacements. Statement of Condition ? The Project has not made monthly deposits of $654 to the replacement reserve since August 2022. Cause ? The Project did not have sufficient cash flows to make the required deposits. Effect or Potential Effect ? The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code ? N ? Reserve for replacements deposits. Questioned Costs ? $3,271 Reporting View of Responsible Officials ? We concur with the auditor?s recommendation. Recommendation ? The Project should deposit the reserve for replacement shortage of $3,271. Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations ? Agree Response Indicator ? Agree Completion Date ? June 30, 2023 Response ? Once the Project starts receiving the subsidy payments, the reserve for replacement deposits will be caught up and made monthly thereafter.
Finding 2022-001
Type of Finding ? Financial Statements and Federal Award Finding Finding Resolution Status ? In progress Criteria or Specific Condition ? The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition ? Annual recertification of existing tenants were not completed due to lack of staffing since April 2022 until February 2023. While the property management company submitted monthly vouchers based on the previous certification, HUD discontinued the subsidy payments since July 2022. At December 31, 2022, the subsidy receivable balance was $24,146. Cause ? The annual recertification was not done due to lack of staffing at the property management company. Effect or Potential Effect ? The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code ? Z ? Eligibility Questioned Costs ? $24,146 Reporting View of Responsible Officials ? We concur with the auditor?s recommendation. Recommendation ? The Project should complete the recertification process for the remaining tenants. Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations ? Agree Response Indicator ? Agree Completion Date ? June 30, 2023 Response ? In February 2023, Cascade Management hired a compliance specialist and resumed the recertification processes. The recertifications for 16 of 22 units have been submitted as of April 19, 2023. Four units became vacant and the management is unable to complete the recertification. The subsidies previously requested for the period without the recertification have been adjusted in the accounting records and will be adjusted on HAP vouchers in May 2023. The remaining two recertifications are in process. The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.
Finding 2022-002
Finding No. 2022-002 ? Section 811 ? CFDA No. 14.181 Type of Finding ? Federal Award Finding Finding Resolution Status ? In progress Criteria or Specific Condition ? The Regulatory Agreement requires the Company to make monthly deposits of $654 to the reserve for replacements. Statement of Condition ? The Project has not made monthly deposits of $654 to the replacement reserve since August 2022. Cause ? The Project did not have sufficient cash flows to make the required deposits. Effect or Potential Effect ? The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code ? N ? Reserve for replacements deposits. Questioned Costs ? $3,271 Reporting View of Responsible Officials ? We concur with the auditor?s recommendation. Recommendation ? The Project should deposit the reserve for replacement shortage of $3,271. Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations ? Agree Response Indicator ? Agree Completion Date ? June 30, 2023 Response ? Once the Project starts receiving the subsidy payments, the reserve for replacement deposits will be caught up and made monthly thereafter.