FAC Explorer

Audit 354364

FY End
2024-12-31
Total Expended
$7.97M
Findings
4
Programs
2
Organization: Victory Crest, Inc. (MD)
Year: 2024 Accepted: 2025-04-23
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
555733 2024-001 Material Weakness - E
555734 2024-001 Material Weakness - E
1132175 2024-001 Material Weakness - E
1132176 2024-001 Material Weakness - E

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $7.02M Yes 1
14.239 Home Investment Partnerships Program $955,894 Yes 1

Contacts

Name Title Type
RCPGJMVN4H13 Sarah O'Rielly Auditee
3014936000 Russell Phillips Auditor
No contacts on file

Notes to SEFA

Title: U.S. Department of Housing and Urban Development Capital Advance program Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Victory Crest, Inc. HUD Project No. 000-EE066, under programs of the federal government for the 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 Victory Crest, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Victory Crest, Inc. For the year ended December 31, 2024, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and 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: Victory Crest, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The balance shown on the schedule of expenditures of federal awards relating to the capital advance consists of $6,719,600 expended in prior years. Section 202 capital advances need not be repaid as long as the owner continues to make the housing available to the low-income elderly for at least 40 years.
Title: HOME Investment Partnership Program (HOME) Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Victory Crest, Inc. HUD Project No. 000-EE066, under programs of the federal government for the 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 Victory Crest, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Victory Crest, Inc. For the year ended December 31, 2024, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and 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: Victory Crest, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Victory Crest, Inc. has received a Prince George's County, Maryland loan under the HOME Investment Partnerships Program for $1,300,000. The loan balance outstanding at the beginning of the period is included in the federal expenditures presented in the Schedule. See Notes to the SEFA for table.

Finding Details

Finding 2024-001
Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: 1 out of 10 tenants tested did not compute monthly tenant and subsidy rent portion accurately. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A sample of 10 tenant files from a population of 59 were selected. We identified exceptions in 1 out of the 10 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administrationFinding Resolution Status: In-process Views of Responsible Officials Management has implemented a process for the Compliance Department to review all files using the HUD rules of calculation and accompanied with a calculation work sheet provided through the software. To ensure the accuracy of the calculations moving forward, review of the hourly rate, number of hours worked and pay frequency will be calculated to verify what is on the calculation worksheet to ensure the accuracy of the information submitted.
Finding 2024-001
Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: 1 out of 10 tenants tested did not compute monthly tenant and subsidy rent portion accurately. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A sample of 10 tenant files from a population of 59 were selected. We identified exceptions in 1 out of the 10 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administrationFinding Resolution Status: In-process Views of Responsible Officials Management has implemented a process for the Compliance Department to review all files using the HUD rules of calculation and accompanied with a calculation work sheet provided through the software. To ensure the accuracy of the calculations moving forward, review of the hourly rate, number of hours worked and pay frequency will be calculated to verify what is on the calculation worksheet to ensure the accuracy of the information submitted.
Finding 2024-001
Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: 1 out of 10 tenants tested did not compute monthly tenant and subsidy rent portion accurately. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A sample of 10 tenant files from a population of 59 were selected. We identified exceptions in 1 out of the 10 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administrationFinding Resolution Status: In-process Views of Responsible Officials Management has implemented a process for the Compliance Department to review all files using the HUD rules of calculation and accompanied with a calculation work sheet provided through the software. To ensure the accuracy of the calculations moving forward, review of the hourly rate, number of hours worked and pay frequency will be calculated to verify what is on the calculation worksheet to ensure the accuracy of the information submitted.
Finding 2024-001
Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: 1 out of 10 tenants tested did not compute monthly tenant and subsidy rent portion accurately. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A sample of 10 tenant files from a population of 59 were selected. We identified exceptions in 1 out of the 10 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administrationFinding Resolution Status: In-process Views of Responsible Officials Management has implemented a process for the Compliance Department to review all files using the HUD rules of calculation and accompanied with a calculation work sheet provided through the software. To ensure the accuracy of the calculations moving forward, review of the hourly rate, number of hours worked and pay frequency will be calculated to verify what is on the calculation worksheet to ensure the accuracy of the information submitted.