FAC Explorer

Audit 356759

FY End
2022-12-31
Total Expended
$2.93M
Findings
4
Programs
3
Organization: Portland Community Reinvestment Initiatives, Inc. (OR)
Year: 2022 Accepted: 2025-05-20
Auditor: Gary McGee & CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
561167 2022-002 Significant Deficiency Yes L
561168 2022-003 Significant Deficiency - L
1137609 2022-002 Significant Deficiency Yes L
1137610 2022-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $1.38M Yes 2
14.218 Community Development Block Grants/entitlement Grants $43,219 - 0
14.169 Housing Counseling Assistance Program $11,000 - 0

Contacts

Name Title Type
KCLKYSUCM7K5 Kymberly Horner Auditee
5032882923 Yee Lee McGee Auditor
No contacts on file

Notes to SEFA

Title: 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: Portland Community Reinvestment Initiatives, Inc. charges indirect costs to some awards, typically less than 10%, based on the terms of the agreements with funders. No indirect costs were charged to the major program. The accompanying schedule of expenditures of federal grant (the “Schedule”) includes the federal award activity of Portland Community Reinvestment Initiatives, Inc. under programs of the federal government for the year ended December 31, 2022. 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 (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of Portland Community Reinvestment Initiatives, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Portland Community Reinvestment Initiatives, Inc. For purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly between Portland Community Reinvestment Initiatives, Inc. and agencies and departments of the Federal Government and all sub-awards to the organization by non-federal organizations pursuant to federal grants, contracts and similar agreements.
Title: 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: Portland Community Reinvestment Initiatives, Inc. charges indirect costs to some awards, typically less than 10%, based on the terms of the agreements with funders. No indirect costs were charged to the major program. 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.
Title: Indirect Cost Rate 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: Portland Community Reinvestment Initiatives, Inc. charges indirect costs to some awards, typically less than 10%, based on the terms of the agreements with funders. No indirect costs were charged to the major program. Portland Community Reinvestment Initiatives, Inc. has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Loan Programs 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: Portland Community Reinvestment Initiatives, Inc. charges indirect costs to some awards, typically less than 10%, based on the terms of the agreements with funders. No indirect costs were charged to the major program. PCRI has issued a note to the City of Portland in connection with the Community Development Block Grants/Entitlement Grants program. The note has a 60-year term. Payments are due annually to the extent excess cash flows are generated. All outstanding principal is due in full in December of 2075. Of the $1,500,000 note, $1,260,874 remains outstanding at December 31, 2022. In addition, PCRI has issued a note to the City of Portland in connection with the HOME Investment Partnerships Program. The note has a 60-year term. Payments are due annually to the extent excess cash flows are generated. All outstanding principal is due in full in April of 2077. Of the $1,486,254 note, $1,375,724 remains outstanding at December 31, 2022. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule of Expenditures of Federal Awards. The following summarizes the organization’s loan program-related activities for the year ended December 31, 2022: See the Notes to teh SEFA for chart/table

Finding Details

Finding 2022-002
Finding Number: 2022-002 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: 2021-002 Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: PCRI did not electronically submit its December 31, 2022 Single Audit reporting package to the Federal Clearinghouse within the required time period. Cause: The organization’s 2022 accounting records were not closed in a timely matter and the audit was not completed prior to the data collection form due date. Effect: PCRI did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs. Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines. Management’s Response: As has been addressed earlier in management’s response to Finding 2022-001, PCRI had created and filled two new positions in the Fiscal Department the Controller and an additional Staff Accountant. The additional staff led to better internal controls and more timely reconciliations throughout 2022. Notwithstanding these efforts, time was needed to train personnel on PCRI systems and emphasis was put on the completion of the subsidiary audits for King Parks Apartments Limited Partnership and MLK & Cook Apartments Limited Partnerships, which are an integral part of the consolidated PCRI audit report, in the early months of 2022 leading to the noted delay in reconciliations for the PCRI audit. In addition to these delays, PCRI once again experienced turnover in the added Staff Accountant position in June of 2023, leading to delays and the employee in the Controller position went on an extended medical leave and subsequently ended employment with PCRI, leading to further delays. Further contributing to delays was the turnover of accounting staff at the property management company with whom PCRI contracts for management of the Maya Angelou and Park Terrace properties which lead to delays in starting those audit engagements which are integral to the consolidated PCRI audit report. In response to this cycle of staff turnover, PCRI contracted with an external service to fill the Staff Accountant position while the search for a permanent employee to fill the position continues to this day, and PCRI has subsequently hired a well-qualified person as Fiscal Director. The property manager for the Maya Angelou and Park Terrace properties has also taken steps to stabilize their accounting operations. These responses have mitigated the risk of delay of future audits as the additional personnel hired in response to the 2021 finding was effective were it not for the untimely turnover of staff during the time when the 2022 PCRI audit was being prepared for and conducted.
Finding 2022-003
Finding Number: 2022-003 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: No Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, and §200.302 (b), Financial Management. Identification, in its accounts, of all federal awards received and expended and the federal program under which they were received. Federal program and federal award identification must include, as applicable, the CFDA title and number, federal award identification number, name of the federal agency, and name of the pass-through entity, if any. Additional criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F – Audit Requirements, §200.510, Financial Statements. Schedule of Expenditures of Federal Awards – The auditee also must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended, as determined in accordance with §200.502, Basis for Determining Federal Awards Expended. At a minimum, the schedule must provide total federal awards expended for each individual federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs, also provide the total for the cluster. Condition: During the audit, we noted that the organization did not maintain a complete schedule of expenditures of federal awards. Cause: The organization did not adequately track federal expenditures and the required information needed to prepare a schedule of expenditures of federal awards. Effect: Failure to prepare an accurate and complete schedule of expenditures of federal awards results in noncompliance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements. Audit Recommendation: We recommend that the organization document and implement policies and procedures to ensure the schedule of expenditures of federal awards is accurate and complete in accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management and Subpart F – Audit Requirements, §200.510, Financial Statements, in order to obtain accurate calculations of major federal programs for the single audit and to ensure the organization is in compliance with all of the reporting requirements as to identify the source and application of funds for federally-funded activities. Management’s Response: The SEFA was assigned to be prepared internally, but unfortunately was not submitted due to staff turnover during the course of the audit. This oversight will be corrected by improving procedures around internal task assignments when employee turnover is experienced in the Fiscal department during the course of the audit.
Finding 2022-002
Finding Number: 2022-002 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: 2021-002 Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: PCRI did not electronically submit its December 31, 2022 Single Audit reporting package to the Federal Clearinghouse within the required time period. Cause: The organization’s 2022 accounting records were not closed in a timely matter and the audit was not completed prior to the data collection form due date. Effect: PCRI did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs. Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines. Management’s Response: As has been addressed earlier in management’s response to Finding 2022-001, PCRI had created and filled two new positions in the Fiscal Department the Controller and an additional Staff Accountant. The additional staff led to better internal controls and more timely reconciliations throughout 2022. Notwithstanding these efforts, time was needed to train personnel on PCRI systems and emphasis was put on the completion of the subsidiary audits for King Parks Apartments Limited Partnership and MLK & Cook Apartments Limited Partnerships, which are an integral part of the consolidated PCRI audit report, in the early months of 2022 leading to the noted delay in reconciliations for the PCRI audit. In addition to these delays, PCRI once again experienced turnover in the added Staff Accountant position in June of 2023, leading to delays and the employee in the Controller position went on an extended medical leave and subsequently ended employment with PCRI, leading to further delays. Further contributing to delays was the turnover of accounting staff at the property management company with whom PCRI contracts for management of the Maya Angelou and Park Terrace properties which lead to delays in starting those audit engagements which are integral to the consolidated PCRI audit report. In response to this cycle of staff turnover, PCRI contracted with an external service to fill the Staff Accountant position while the search for a permanent employee to fill the position continues to this day, and PCRI has subsequently hired a well-qualified person as Fiscal Director. The property manager for the Maya Angelou and Park Terrace properties has also taken steps to stabilize their accounting operations. These responses have mitigated the risk of delay of future audits as the additional personnel hired in response to the 2021 finding was effective were it not for the untimely turnover of staff during the time when the 2022 PCRI audit was being prepared for and conducted.
Finding 2022-003
Finding Number: 2022-003 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: No Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, and §200.302 (b), Financial Management. Identification, in its accounts, of all federal awards received and expended and the federal program under which they were received. Federal program and federal award identification must include, as applicable, the CFDA title and number, federal award identification number, name of the federal agency, and name of the pass-through entity, if any. Additional criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F – Audit Requirements, §200.510, Financial Statements. Schedule of Expenditures of Federal Awards – The auditee also must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended, as determined in accordance with §200.502, Basis for Determining Federal Awards Expended. At a minimum, the schedule must provide total federal awards expended for each individual federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs, also provide the total for the cluster. Condition: During the audit, we noted that the organization did not maintain a complete schedule of expenditures of federal awards. Cause: The organization did not adequately track federal expenditures and the required information needed to prepare a schedule of expenditures of federal awards. Effect: Failure to prepare an accurate and complete schedule of expenditures of federal awards results in noncompliance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements. Audit Recommendation: We recommend that the organization document and implement policies and procedures to ensure the schedule of expenditures of federal awards is accurate and complete in accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management and Subpart F – Audit Requirements, §200.510, Financial Statements, in order to obtain accurate calculations of major federal programs for the single audit and to ensure the organization is in compliance with all of the reporting requirements as to identify the source and application of funds for federally-funded activities. Management’s Response: The SEFA was assigned to be prepared internally, but unfortunately was not submitted due to staff turnover during the course of the audit. This oversight will be corrected by improving procedures around internal task assignments when employee turnover is experienced in the Fiscal department during the course of the audit.