FAC Explorer

Audit 356765

FY End
2024-06-30
Total Expended
$1.54M
Findings
6
Programs
2
Organization: M. Carter Plaza (OR)
Year: 2024 Accepted: 2025-05-20
Auditor: Gary McGee & CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
561175 2024-001 Significant Deficiency Yes L
561176 2024-002 Significant Deficiency - N
561177 2024-003 Significant Deficiency - N
1137617 2024-001 Significant Deficiency Yes L
1137618 2024-002 Significant Deficiency - N
1137619 2024-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.139 Mortgage Insurance Rental Housing in Urban Renewal Areas $1.28M Yes 3
14.195 Project-Based Rental Assistance (pbra) $261,083 - 0

Contacts

Name Title Type
WLPHARGYQFP8 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: Y Rate Explanation: M. Carter Plaza has elected to use the 10-percent de minimis indirect cost rate, as allowed under the Uniform Guidance. However, during the year ended June 30, 2024, there were no indirect costs charged to federal awards The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of M. Carter Plaza under programs of the federal government for the year ended June 30, 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 (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of M. Carter Plaza, it is not intended to and does not present the financial position, changes in net assets, or cash flows of M. Carter Plaza. For purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly between M. Carter Plaza 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: Y Rate Explanation: M. Carter Plaza has elected to use the 10-percent de minimis indirect cost rate, as allowed under the Uniform Guidance. However, during the year ended June 30, 2024, there were no indirect costs charged to federal awards 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: Y Rate Explanation: M. Carter Plaza has elected to use the 10-percent de minimis indirect cost rate, as allowed under the Uniform Guidance. However, during the year ended June 30, 2024, there were no indirect costs charged to federal awards M. Carter Plaza has elected to use the 10-percent de minimis indirect cost rate, as allowed under the Uniform Guidance. However, during the year ended June 30, 2024, there were no indirect costs charged to federal awards.
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: Y Rate Explanation: M. Carter Plaza has elected to use the 10-percent de minimis indirect cost rate, as allowed under the Uniform Guidance. However, during the year ended June 30, 2024, there were no indirect costs charged to federal awards The U.S. Department of Housing and Urban Development has issued notes and mortgages to M. Carter Plaza in connection with certain capital advances. These notes and mortgages have 40 to 55-year terms. M. Carter Plaza is not required to repay principal or interest and the notes are forgiven at maturity, as long as the organization provides housing for the designated class of people in accordance with applicable HUD requirements. 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 June 30, 2024: See the Notes to the SEFA for chart/table

Finding Details

Finding 2024-001
Finding number: 2024-001 Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Finding type: Significant deficiency over compliance Compliance requirement: Reporting Questioned costs: n/a Repeat finding: Yes 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: M. Carter Plaza did not electronically submit its June 30, 2023 Single Audit reporting package to the Federal Clearinghouse within the required time period. Cause: M. Carter Plaza’s 2023 accounting records were not closed in a timely matter and the audit was not completed prior to the data collection form due date. Effect: M. Carter Plaza 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: The closing of books and preparation for audit procedures is being addressed via improvements in internal controls related to property accounting and month end closing procedures as well as the hiring of more experienced staff during fiscal year 2024-2025. The organization anticipates that these improvements will allow for the audit to be completed within the required timeframe in the upcoming cycle
Finding 2024-002
Finding number: 2024-002 Finding type: Federal award finding Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Control deficiency type: Significant deficiency over compliance Instance of noncompliance: Yes Compliance requirement: Special Tests and Provisions Questioned costs: n/a Repeat finding: No Criteria: In accordance with the Regulatory Agreement with HUD, the organization is required to make annual deposits of surplus cash to the residual receipts reserve account within sixty days following the end of the fiscal year. Condition: The organization had surplus cash that was not deposited in the residual receipts reserve account within sixty days following the fiscal years ended June 30, 2024 and 2023. Cause: The required deposit was not made. Effect: The organization was not in compliance with the Regulatory Agreement. In addition, by not making the required deposits, the organization’s operating cash position may be inaccurate and misleading at times. The organization may base decisions on the operating cash balances when, in fact, the cash balances would be less had the organization made the required deposits. Audit Recommendation: We recommend that the residual receipt deposit be made within sixty days following the end of the fiscal year as required by the Regulatory Agreement. Controls should be implemented to ensure compliance with this requirement. Management Response: We agree with the finding and the recommendation. The failure to make this required deposit was caused by the timing of the completion of the audit, which is used to determine the amount that is required to make the deposit. Improving month and year-end close processes and the hiring of more experienced staff will allow the audit to be completed on schedule and, consequently, the required residual reserve deposit to be completed by the required deadline.
Finding 2024-003
Finding number: 2024-003 Finding type: Federal award finding Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Control deficiency type: Significant deficiency over compliance Instance of noncompliance: Yes Compliance requirement: Special Tests and Provisions Questioned costs: n/a Repeat finding: No Criteria: In accordance with the Regulatory Agreement with HUD, the organization is required to make monthly deposits of $1,686 to the replacement reserve account. Condition: The organization did not make the required deposits in December of 2023, and January and February of 2024. Cause: The required deposit was not made. Effect: The organization was not in compliance with the Regulatory Agreement and the replacement reserve is unfunded for the year ended June 30, 2024. Audit Recommendation: We recommend that the replacement reserve account deposit be made monthly as required by the Regulatory Agreement. Controls should be implemented to ensure compliance with this requirement. Management Response: Due to a transition of management in the property accounting department during the fiscal year, the funding of the replacement reserve account did not happen due to a lapse in process during the transition. Processes and controls have since been reestablished to ensure that the funding of the replacement reserve occurs once again on a monthly basis.
Finding 2024-001
Finding number: 2024-001 Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Finding type: Significant deficiency over compliance Compliance requirement: Reporting Questioned costs: n/a Repeat finding: Yes 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: M. Carter Plaza did not electronically submit its June 30, 2023 Single Audit reporting package to the Federal Clearinghouse within the required time period. Cause: M. Carter Plaza’s 2023 accounting records were not closed in a timely matter and the audit was not completed prior to the data collection form due date. Effect: M. Carter Plaza 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: The closing of books and preparation for audit procedures is being addressed via improvements in internal controls related to property accounting and month end closing procedures as well as the hiring of more experienced staff during fiscal year 2024-2025. The organization anticipates that these improvements will allow for the audit to be completed within the required timeframe in the upcoming cycle
Finding 2024-002
Finding number: 2024-002 Finding type: Federal award finding Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Control deficiency type: Significant deficiency over compliance Instance of noncompliance: Yes Compliance requirement: Special Tests and Provisions Questioned costs: n/a Repeat finding: No Criteria: In accordance with the Regulatory Agreement with HUD, the organization is required to make annual deposits of surplus cash to the residual receipts reserve account within sixty days following the end of the fiscal year. Condition: The organization had surplus cash that was not deposited in the residual receipts reserve account within sixty days following the fiscal years ended June 30, 2024 and 2023. Cause: The required deposit was not made. Effect: The organization was not in compliance with the Regulatory Agreement. In addition, by not making the required deposits, the organization’s operating cash position may be inaccurate and misleading at times. The organization may base decisions on the operating cash balances when, in fact, the cash balances would be less had the organization made the required deposits. Audit Recommendation: We recommend that the residual receipt deposit be made within sixty days following the end of the fiscal year as required by the Regulatory Agreement. Controls should be implemented to ensure compliance with this requirement. Management Response: We agree with the finding and the recommendation. The failure to make this required deposit was caused by the timing of the completion of the audit, which is used to determine the amount that is required to make the deposit. Improving month and year-end close processes and the hiring of more experienced staff will allow the audit to be completed on schedule and, consequently, the required residual reserve deposit to be completed by the required deadline.
Finding 2024-003
Finding number: 2024-003 Finding type: Federal award finding Federal Assistance Listing No: 14.139 Program name: Mortgage Insurance Rental Housing in Urban Renewal Areas Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: n/a Grant number: n/a Federal award year: 2024 Control deficiency type: Significant deficiency over compliance Instance of noncompliance: Yes Compliance requirement: Special Tests and Provisions Questioned costs: n/a Repeat finding: No Criteria: In accordance with the Regulatory Agreement with HUD, the organization is required to make monthly deposits of $1,686 to the replacement reserve account. Condition: The organization did not make the required deposits in December of 2023, and January and February of 2024. Cause: The required deposit was not made. Effect: The organization was not in compliance with the Regulatory Agreement and the replacement reserve is unfunded for the year ended June 30, 2024. Audit Recommendation: We recommend that the replacement reserve account deposit be made monthly as required by the Regulatory Agreement. Controls should be implemented to ensure compliance with this requirement. Management Response: Due to a transition of management in the property accounting department during the fiscal year, the funding of the replacement reserve account did not happen due to a lapse in process during the transition. Processes and controls have since been reestablished to ensure that the funding of the replacement reserve occurs once again on a monthly basis.