FAC Explorer

Audit 354657

FY End
2024-12-31
Total Expended
$3.96M
Findings
8
Programs
2
Organization: The Pinemont Apartments, Inc. (TX)
Year: 2024 Accepted: 2025-04-25
Auditor: Pittsford Samuels PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
555943 2024-001 Significant Deficiency - P
555944 2024-002 Significant Deficiency - P
555945 2024-003 Significant Deficiency - P
555946 2024-004 - Yes L
1132385 2024-001 Significant Deficiency - P
1132386 2024-002 Significant Deficiency - P
1132387 2024-003 Significant Deficiency - P
1132388 2024-004 - Yes L

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.91M Yes 4
14.195 Project-Based Rental Assistance (pbra) $1.05M Yes 0

Contacts

Name Title Type
PCWYL29AANG4 Jo Ortiz Auditee
7139574430 Nancy MacK Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Project, FHA/Contract Number 114-11392 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 (CFR) 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 Project, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Project.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported in 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 reimbursements.
Title: INDIRECT COST RATE Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: HUD INSURED LOAN Accounting Policies: Expenditures reported in 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 reimbursements. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has received a HUD insured loan under section 223(f) of the National Housing Act. The loan balance at the beginning of the year is included in the federal expenditures presented in the schedule. The Project has received no additional funds during the year. The loan is reported under liabilities in the statement of financial position. The balance of the loan as of December 31, 2024 is $2,836,476.

Finding Details

Finding 2024-001
Findings reference number: 2024-001 - Title and AL Number of Federal Program: Mortgage Insurance for purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A -Repeat finding: No - Criteria: All transactions should be recorded in a proper and consistent manner. - Condition: The property suffered significant mold damage from a weather events during the year ended December 31, 2024. Mold remediation expenses were capitalized. - Cause: The Project Administrator miscoded mold remediation expenses as capital expenditure in error. - Effect: Audit adjustments of significant amounts had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to record all transactions correctly. - Contract number: 114-11392 -Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that all transactions are classified and recorded correctly. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to ensure all transactions are classified and recorded correctly.
Finding 2024-002
Findings reference number: 2024-002 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Fixed assets recorded on the books should be accurate and complete. - Condition: The property suffered significant damages from two weather events during the year ended December 31, 2024, resulting in repairs and replacement expenditure. The fixed assets replaced were not written off. - Cause: The contract accountant who prepares the in-house financial statements and the detail fixed assets register overlooked disposing of the fixed assets that had been replaced. - Effect: Audit adjustments of significant amounts had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to have the in-house financial statements completed at least quarterly. - Contract number: 114-11392 - Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that fixed assets recorded in the books of account actually exist. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to reconcile fixed assets as reported on the books with the actual assets on the property.
Finding 2024-003
Findings reference number: 2024-003 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Bank accounts should be reconciled on a monthly basis. - Condition: The operating account at year end was not reconciled and had many open items. - Cause: The contract accountant who prepares the in-house financial statements and bank reconciliations was unable to properly prepare the bank reconciliations. The Project also changed their accounting software mid year, leading to a lot of duplication and making the reconciliation process difficult. - Effect: An audit adjustment of a significant amount had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to reconcile bank accounts each month. - Contract number: 114-11392 - Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that bank accounts are reconciled on a monthly basis. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to reconcile the bank accounts each month.
Finding 2024-004
Findings reference number: 2024-004 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Compliance - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: Yes - Criteria: The financial statement submission to HUD's Real Estate Assessment Center (REAC) for the year ended December 31, 2024 is due by March 31, 2025. - The Data Collection Form (DCF) should be submitted to the by the earlier of 30 days after receipt of the final audit report or nine months after year end. - Condition: The financial statement submission for the year ending December 31, 2024 was filed late. - Cause: The bookkeeper for the Project was unable to close the books and complete the year-end accounting on a timely basis. - Effect: The REAC submission was filed late. - Noncompliance code: Z – Other - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to file future reports on a timely basis. - Contract number: 114-11392 - Context: This was noted while performing procedures on the reporting requirements. - Recommendation: The audited financial statements should be submitted to REAC by the reporting deadline. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will ensure that the financial statements are submitted to REAC by the reporting deadline.
Finding 2024-001
Findings reference number: 2024-001 - Title and AL Number of Federal Program: Mortgage Insurance for purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A -Repeat finding: No - Criteria: All transactions should be recorded in a proper and consistent manner. - Condition: The property suffered significant mold damage from a weather events during the year ended December 31, 2024. Mold remediation expenses were capitalized. - Cause: The Project Administrator miscoded mold remediation expenses as capital expenditure in error. - Effect: Audit adjustments of significant amounts had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to record all transactions correctly. - Contract number: 114-11392 -Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that all transactions are classified and recorded correctly. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to ensure all transactions are classified and recorded correctly.
Finding 2024-002
Findings reference number: 2024-002 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Fixed assets recorded on the books should be accurate and complete. - Condition: The property suffered significant damages from two weather events during the year ended December 31, 2024, resulting in repairs and replacement expenditure. The fixed assets replaced were not written off. - Cause: The contract accountant who prepares the in-house financial statements and the detail fixed assets register overlooked disposing of the fixed assets that had been replaced. - Effect: Audit adjustments of significant amounts had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to have the in-house financial statements completed at least quarterly. - Contract number: 114-11392 - Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that fixed assets recorded in the books of account actually exist. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to reconcile fixed assets as reported on the books with the actual assets on the property.
Finding 2024-003
Findings reference number: 2024-003 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Internal control - Resolution Status: In process. - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Bank accounts should be reconciled on a monthly basis. - Condition: The operating account at year end was not reconciled and had many open items. - Cause: The contract accountant who prepares the in-house financial statements and bank reconciliations was unable to properly prepare the bank reconciliations. The Project also changed their accounting software mid year, leading to a lot of duplication and making the reconciliation process difficult. - Effect: An audit adjustment of a significant amount had to be made to correct the situation. - Noncompliance code: S - Internal control deficiencies - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to reconcile bank accounts each month. - Contract number: 114-11392 - Context: This was noted while performing the audit. - Recommendation: Procedures should be implemented to ensure that bank accounts are reconciled on a monthly basis. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will implement procedures to reconcile the bank accounts each month.
Finding 2024-004
Findings reference number: 2024-004 - Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 - Type of finding: Compliance - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: Yes - Criteria: The financial statement submission to HUD's Real Estate Assessment Center (REAC) for the year ended December 31, 2024 is due by March 31, 2025. - The Data Collection Form (DCF) should be submitted to the by the earlier of 30 days after receipt of the final audit report or nine months after year end. - Condition: The financial statement submission for the year ending December 31, 2024 was filed late. - Cause: The bookkeeper for the Project was unable to close the books and complete the year-end accounting on a timely basis. - Effect: The REAC submission was filed late. - Noncompliance code: Z – Other - Questioned costs: None - Reporting views of officials: Management agrees with the finding and will make every effort to file future reports on a timely basis. - Contract number: 114-11392 - Context: This was noted while performing procedures on the reporting requirements. - Recommendation: The audited financial statements should be submitted to REAC by the reporting deadline. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: In the future, management will ensure that the financial statements are submitted to REAC by the reporting deadline.