FAC Explorer

Audit 35349

FY End
2022-06-30
Total Expended
$2.04M
Findings
4
Programs
2
Organization: The Havens, Inc. (NC)
Year: 2022 Accepted: 2023-03-29
Auditor: Apple Koceja & Associates PA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
38113 2022-001 Material Weakness Yes P
38114 2022-002 - - P
614555 2022-001 Material Weakness Yes P
614556 2022-002 - - P

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $1.87M Yes 2
14.195 Section 8 Housing Assistance Payments Program $169,393 - 0

Contacts

Name Title Type
YHYDPADGFDT4 Mickie Helms Auditee
7046081436 Brett Koceja Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation- Accounting Policies: Summary of Significant 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: 10% De Minimis Cost Rate-The Havens, Inc. did not elect to use the de minimis cost rate. The accompanying schedule of expenditures of federal awards includes the federal award activity of The Havens, Inc. 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 The Havens, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of The Havens, Inc.
Title: U.S. Department of Housing and Urban Development Loan Program- Accounting Policies: Summary of Significant 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: 10% De Minimis Cost Rate-The Havens, Inc. did not elect to use the de minimis cost rate. The Havens, Inc. has received a U.S. Department of Housing and Urban Development capital advance under Section 811 of the National Housing Act. The CFDA Number 14.181 (Supportive Housing for Persons with Disabilities) amount of $1,873,300 represents the outstanding loan balance at June 30, 2022, the end of the audit period.

Finding Details

Finding 2022-001
Supportive Housing for Persons with Disabilities (Section 811), CFDA 14.181 Criteria: A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion. Statement of Condition: The Organization has a lack of segregation of duties in certain areas due to a limited staff. Cause: There are a limited number of individuals involved in the internal control process. Effect: Inadequate segregation of duties could adversely affect the Organization?s ability to detect misstatements material to the financial statements in a timely manner by individuals in the normal course of performing their assigned functions. Recommendation: We recognize that it may not be cost effective for the Organization to hire additional staff. The Organization should continue to rely on compensating controls in place. Views of Responsible Officials: We agree with the finding. Due to cost restraints, the Organization will not hire any additional staff. The Organization will continue to rely on compensating controls in place.
Finding 2022-002
Supportive Housing for Persons with Disabilities (Section 811), CFDA 14.181 Criteria: The Code of Federal Regulations (24 CFR 5.703) states that HUD housing must be decent, safe, sanitary and in good repair. Also, the Project?s HUD Regulatory Agreement states that the property must be maintained in good and substantial repair and condition. Statement of Condition: On July 9, 2021, the Project received a score of 55c on its HUD physical inspection. This score resulted from numerous health and safety and other deficiencies. Cause: Some Project repairs were delayed by COVID restrictions and resulting labor and supply shortages as well as by insufficient cash flows. Also, management contended that some defects were cited incorrectly. Effect: A physical inspection score below 60 indicates that the owner may not be fulfilling its contractual obligations to HUD and that the residents may not be receiving the quality of housing to which they are entitled. Recommendation: The owner should correct all deficiencies and make all necessary repairs as soon as possible to be in compliance with HUD. Views of Responsible Officials: The low score reflects issues with drainage and tripping hazards on the grounds plus paint on a sprinkler head ring. There were very few issues in the apartments themselves. Our appeal for this inspection was denied. Subsequently, the Project received a score of 55 on its September 15, 2022 HUD physical inspection, but management?s appeal for this inspection raised the score to 63.
Finding 2022-001
Supportive Housing for Persons with Disabilities (Section 811), CFDA 14.181 Criteria: A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion. Statement of Condition: The Organization has a lack of segregation of duties in certain areas due to a limited staff. Cause: There are a limited number of individuals involved in the internal control process. Effect: Inadequate segregation of duties could adversely affect the Organization?s ability to detect misstatements material to the financial statements in a timely manner by individuals in the normal course of performing their assigned functions. Recommendation: We recognize that it may not be cost effective for the Organization to hire additional staff. The Organization should continue to rely on compensating controls in place. Views of Responsible Officials: We agree with the finding. Due to cost restraints, the Organization will not hire any additional staff. The Organization will continue to rely on compensating controls in place.
Finding 2022-002
Supportive Housing for Persons with Disabilities (Section 811), CFDA 14.181 Criteria: The Code of Federal Regulations (24 CFR 5.703) states that HUD housing must be decent, safe, sanitary and in good repair. Also, the Project?s HUD Regulatory Agreement states that the property must be maintained in good and substantial repair and condition. Statement of Condition: On July 9, 2021, the Project received a score of 55c on its HUD physical inspection. This score resulted from numerous health and safety and other deficiencies. Cause: Some Project repairs were delayed by COVID restrictions and resulting labor and supply shortages as well as by insufficient cash flows. Also, management contended that some defects were cited incorrectly. Effect: A physical inspection score below 60 indicates that the owner may not be fulfilling its contractual obligations to HUD and that the residents may not be receiving the quality of housing to which they are entitled. Recommendation: The owner should correct all deficiencies and make all necessary repairs as soon as possible to be in compliance with HUD. Views of Responsible Officials: The low score reflects issues with drainage and tripping hazards on the grounds plus paint on a sprinkler head ring. There were very few issues in the apartments themselves. Our appeal for this inspection was denied. Subsequently, the Project received a score of 55 on its September 15, 2022 HUD physical inspection, but management?s appeal for this inspection raised the score to 63.