FAC Explorer

Audit 353261

FY End
2024-12-31
Total Expended
$829,228
Findings
2
Programs
1
Organization: Kan-Do Apartment, Inc. (KS)
Year: 2024 Accepted: 2025-04-10
Auditor: Ifft & CO PA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
554539 2024-001 - - N
1130981 2024-001 - - N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $39,428 Yes 0

Contacts

Name Title Type
V6LYYNMHFM95 Susan Crain Lewis Auditee
9132812221 Keith Hall Auditor
No contacts on file

Notes to SEFA

Title: Note A - 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. De Minimis Rate Used: N Rate Explanation: Kan-Do Apartments, Inc. has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Kan-Do Apartments, Inc. under programs of the federal government for the year ended December 31, 2024 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 (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Kan-Do Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Kan-Do Apartments, Inc.
Title: Note B - 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 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: Kan-Do Apartments, Inc. has elected not to use the 10% 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 the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Kan-Do Apartments, Inc. has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note C - Loan and Loan Guarantees 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. De Minimis Rate Used: N Rate Explanation: Kan-Do Apartments, Inc. has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The capital advance provided by HUD on May 9, 1994 of $789,800 is considered a loan for purposes of the Schedule but is included in net assets for financial reporting purposes.

Finding Details

Finding 2024-001
FINDING NO. 2024-001: Section 811, CFDA 14.181 - Special Tests and Provisions Criteria: The balance of the tenant security deposits held in trust should be equal to or greater than the balance of the tenant security deposit liability. Condition: The balance of the tenant security deposits held in trust is less than the balance of the tenant security deposit liability. Cause: Management made transfers from the security deposit cash account to the operating cash account totaling $2,900 in December 2024. Effect: The tenant security deposits held in trust were underfunded. Context: According to the regulatory agreement, the amount of the security deposit cash account must at all times equal the total amount collected from the families currently in occupancy plus any accrued interest. There are no questioned costs. Recommendation: Management should immediately transfer enough funds from the operating cash account to increase the tenant security deposits held in trust to a balance equal to the security deposit liability account. In the future, management should make transfers from the tenant security deposits held in trust only for forfeited security deposits or to return the security deposit to tenants moving out of the Project. Further, management should ensure the balance of the security deposit cash account is never less than the balance of the security deposit liability account. Views of Responsible Officials and Planned Corrective Actions: Management of Kan-Do Apartments, Inc. agrees with the finding, and the auditors’ recommendations have been adopted. The error is the result of two transfers, one of which was made to the wrong bank account and the other to the wrong client account. Both were corrected immediately upon discovery, on January 2, 2025 and February 3, 2025, respectively. Going forward, all transfers will be reviewed against the tenant list and confirmed with the Director, Residential Services, prior to being executed.
Finding 2024-001
FINDING NO. 2024-001: Section 811, CFDA 14.181 - Special Tests and Provisions Criteria: The balance of the tenant security deposits held in trust should be equal to or greater than the balance of the tenant security deposit liability. Condition: The balance of the tenant security deposits held in trust is less than the balance of the tenant security deposit liability. Cause: Management made transfers from the security deposit cash account to the operating cash account totaling $2,900 in December 2024. Effect: The tenant security deposits held in trust were underfunded. Context: According to the regulatory agreement, the amount of the security deposit cash account must at all times equal the total amount collected from the families currently in occupancy plus any accrued interest. There are no questioned costs. Recommendation: Management should immediately transfer enough funds from the operating cash account to increase the tenant security deposits held in trust to a balance equal to the security deposit liability account. In the future, management should make transfers from the tenant security deposits held in trust only for forfeited security deposits or to return the security deposit to tenants moving out of the Project. Further, management should ensure the balance of the security deposit cash account is never less than the balance of the security deposit liability account. Views of Responsible Officials and Planned Corrective Actions: Management of Kan-Do Apartments, Inc. agrees with the finding, and the auditors’ recommendations have been adopted. The error is the result of two transfers, one of which was made to the wrong bank account and the other to the wrong client account. Both were corrected immediately upon discovery, on January 2, 2025 and February 3, 2025, respectively. Going forward, all transfers will be reviewed against the tenant list and confirmed with the Director, Residential Services, prior to being executed.