FAC Explorer

Audit 353899

FY End
2024-12-31
Total Expended
$3.42M
Findings
4
Programs
2
Organization: Schoolhouse Apartments, Inc. (CT)
Year: 2024 Accepted: 2025-04-17
Auditor: Seward and Monde

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
555264 2024-001 - - N
555265 2024-002 - - N
1131706 2024-001 - - N
1131707 2024-002 - - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.78M Yes 2
14.195 Section 8 Housing Assistance Payments Program $646,104 - 0

Contacts

Name Title Type
V1TCJNUUJPD7 Sabine Cox Auditee
2032044809 Michele Loso Boisvert Auditor
No contacts on file

Notes to SEFA

Title: U.S. Department of Housing and Urban Development Loan Program Accounting Policies: Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Schoolhouse Apartments, Inc., HUD Project No. 017-11124, under programs of the federal government for the fiscal year ended December 31, 2024. 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 Schoolhouse Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Schoolhouse Apartments, Inc. Note 2 - 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: Schoolhouse Apartments, Inc. did not recover its indirect costs using the 10 percent de minimis indirect cost rate allowed under Section 200.414 of the Uniform Guidance. Schoolhouse Apartments, Inc. has received a U.S. Department of Housing and Urban Development loan guarantee under Section 223(f) of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Schoolhouse Apartments, Inc. received no additional loans during the year. The balance of the loan outstanding at December 31, 2024 consists of: Outstanding Balance CFDA Number Program Name at December 31, 2024 14.155 Mortgage Insurance for the Purchase or $2,695,368 Refinancing of Existing Multifamily Housing Projects

Finding Details

Finding 2024-001
Statement of Condition: Requests for rent increases for FY 2024 were not submitted timely. Criteria: HUD regulations require that a rent increase be requested at least 60 days prior to date of requested increase. Effect: Noncompliance with HUD regulations. Cause: Due to employee turnover and transitions. Context: During testing, it was noted that a rent increase effective for January 1, 2024 was submitted on March 7, 2024. Recommendation: Management should establish procedures to ensure that rent increase requests to HUD be submitted timely. Management’s Response and Corrective Action Plan: Management has since revised the Budget Process, to include improved tracking and regular monthly update meetings with all relevant departments to ensure timely submissions for rental increases and affiliated paperwork, effective immediately.
Finding 2024-002
Statement of Condition: Findings from the property’s 2023 Management and Occupancy Review (MOR) report have not been resolved. Criteria: HUD 4350.1, Chapter 6 Rev-1, paragraph 6-13 states that targeted completion dates (TCDs) must be noted for all deficiencies identified during the review and may not exceed 30 calendar days. Owner/agents must provide documentation to support that the deficiencies were corrected by the TCD noted on the Summary Report. If additional time is needed to correct deficiencies, the owner/agent’s corrective action plan will be due within 30 calendar days. The corrective action plan must include targeted timeframes for resolving the deficiencies and must be monitored by the reviewer until all deficiencies have been addressed. Effect: Noncompliance with HUD regulations. Cause: Due to employee turnover and transitions. Context: The Organization did not resolve 2023 MOR findings nor provide updated TCDs to HUD. Recommendation: The Organization should establish procedures to ensure compliance and provide a complete response to all MOR report findings within the 30-day requirement and if needed, provide updated TCDs to HUD. Management’s Response and Corrective Action Plan: We agree with the finding and have submitted our responses to the findings identified in the 2023 MOR on March 6, 2025. We will put procedures in place to respond to MOR reports within the 30-day deadline.
Finding 2024-001
Statement of Condition: Requests for rent increases for FY 2024 were not submitted timely. Criteria: HUD regulations require that a rent increase be requested at least 60 days prior to date of requested increase. Effect: Noncompliance with HUD regulations. Cause: Due to employee turnover and transitions. Context: During testing, it was noted that a rent increase effective for January 1, 2024 was submitted on March 7, 2024. Recommendation: Management should establish procedures to ensure that rent increase requests to HUD be submitted timely. Management’s Response and Corrective Action Plan: Management has since revised the Budget Process, to include improved tracking and regular monthly update meetings with all relevant departments to ensure timely submissions for rental increases and affiliated paperwork, effective immediately.
Finding 2024-002
Statement of Condition: Findings from the property’s 2023 Management and Occupancy Review (MOR) report have not been resolved. Criteria: HUD 4350.1, Chapter 6 Rev-1, paragraph 6-13 states that targeted completion dates (TCDs) must be noted for all deficiencies identified during the review and may not exceed 30 calendar days. Owner/agents must provide documentation to support that the deficiencies were corrected by the TCD noted on the Summary Report. If additional time is needed to correct deficiencies, the owner/agent’s corrective action plan will be due within 30 calendar days. The corrective action plan must include targeted timeframes for resolving the deficiencies and must be monitored by the reviewer until all deficiencies have been addressed. Effect: Noncompliance with HUD regulations. Cause: Due to employee turnover and transitions. Context: The Organization did not resolve 2023 MOR findings nor provide updated TCDs to HUD. Recommendation: The Organization should establish procedures to ensure compliance and provide a complete response to all MOR report findings within the 30-day requirement and if needed, provide updated TCDs to HUD. Management’s Response and Corrective Action Plan: We agree with the finding and have submitted our responses to the findings identified in the 2023 MOR on March 6, 2025. We will put procedures in place to respond to MOR reports within the 30-day deadline.