FAC Explorer

Audit 357074

FY End
2024-12-31
Total Expended
$1.79M
Findings
6
Programs
3
Organization: Berlin Retirement Homes, Inc. (MA)
Year: 2024 Accepted: 2025-05-26
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
561500 2024-002 Significant Deficiency Yes B
561501 2024-003 Significant Deficiency Yes N
561502 2024-004 Significant Deficiency - N
1137942 2024-002 Significant Deficiency Yes B
1137943 2024-003 Significant Deficiency Yes N
1137944 2024-004 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $1.57M Yes 2
14.195 Section 8 Housing Assistance Payments Program $198,496 Yes 1
10.427 Rural Rental Assistance Payments $14,793 - 0

Contacts

Name Title Type
MJQEUHH4JLB3 Cheryl Sharon Auditee
9788380442 Sheila McNeil Auditor
No contacts on file

Notes to SEFA

Title: Balance of Outstanding Loans Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Berlin Retirement Homes, Inc. dba Northbrook Village 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 Berlin Retirement Homes, Inc. dba Northbrook Village it is not intended to and does not present the financial position, changes in net position, or cash flows of Berlin Retirement Homes, Inc. dba Northbrook Village.(1) 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: Berlin Retirement Homes, Inc. dba Northbrook Village has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Loans outstanding at the beginning of the year and loans received during the year are included in the federal expenditures presented in the Schedule. There were no new loans received during year ended December 31, 2024. The balance of the loans outstanding at December 31, 2024 is $1,538,151, Program - Rural Rental Housing Loans, AL # 10.415.

Finding Details

Finding 2024-002
Finding # 2024-002 – Allowable Costs Repeat Finding: Yes – 2023-001 AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $2,642.34 Criteria: 40 cash disbursements were tested and one was noted as applicable to another project of the management company and one was a duplicate payment to the management company for an invoice. Condition: Expenses charged to project operations, whether for management agent services or other expenses, must be reasonable, typical, necessary and show a clear benefit to the residents of the property. Cause: One payment was from a credit card statement with multiple invoices for various properties and although the invoice clearly stated the allocable property this was missed upon entry into the general ledger. The other payment was a duplicate payment of an invoice that was not properly marked as paid upon initial payment.Effect: The project paid for expenses that were not allocable to the project. Auditor’s Recommendation: Invoices should be scrutinized closely and applied to the appropriate project. All invoices should be defaced upon payment to ensure no duplicate payment occurs. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan.
Finding 2024-003
Finding # 2024-003 – Special Tests and Provisions AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $40,486 Repeat Finding: Yes – 2023-002 Criteria: Deposits to the reserve account were not made in accordance with the requirements of the program. Condition: Owners, as required, shall establish a reserve for replacement account and make deposits in accordance with RD requirements, usually the loan agreement or other similar business agreement. Cause: Staff missed setting up the recurring deposit but noted this prior to the audit and made the catch-up payment as required in 2025. Effect: The Project’s replacement reserve was underfunded for the year. Auditor’s Recommendation: Reserve deposits should be made timely. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan.
Finding 2024-004
Finding # 2024-004 – Special Tests and Provisions Repeat Finding: No AL# 14.195 U.S. Department of Housing and Urban Development Questioned Cost: $0 Criteria: For deposits held at institutions which exceed federally insured limits, HUD Handbook 4370.2, paragraph 2-6 requires that the management agent or entity owner monitor the financial institution’s rating on a quarterly basis to ensure consistency with minimally acceptable ratings as established by the Government National Mortgage Association and maintain documentation of the rating for at least 3 years. Condition: Combined deposits on hand at Clinton Savings Bank exceed federally insured limits and no monitoring of the institution was documented.Effect: The assets of the project could be subject to risk. Auditor’s Recommendation: A monitoring policy should be instituted to properly document that balances in excess of FDIC are not subject to significant risk. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan. Cause: The account balances at Clinton Savings Bank exceed $250,000 and no formal policy is in place for monitoring.
Finding 2024-002
Finding # 2024-002 – Allowable Costs Repeat Finding: Yes – 2023-001 AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $2,642.34 Criteria: 40 cash disbursements were tested and one was noted as applicable to another project of the management company and one was a duplicate payment to the management company for an invoice. Condition: Expenses charged to project operations, whether for management agent services or other expenses, must be reasonable, typical, necessary and show a clear benefit to the residents of the property. Cause: One payment was from a credit card statement with multiple invoices for various properties and although the invoice clearly stated the allocable property this was missed upon entry into the general ledger. The other payment was a duplicate payment of an invoice that was not properly marked as paid upon initial payment.Effect: The project paid for expenses that were not allocable to the project. Auditor’s Recommendation: Invoices should be scrutinized closely and applied to the appropriate project. All invoices should be defaced upon payment to ensure no duplicate payment occurs. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan.
Finding 2024-003
Finding # 2024-003 – Special Tests and Provisions AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $40,486 Repeat Finding: Yes – 2023-002 Criteria: Deposits to the reserve account were not made in accordance with the requirements of the program. Condition: Owners, as required, shall establish a reserve for replacement account and make deposits in accordance with RD requirements, usually the loan agreement or other similar business agreement. Cause: Staff missed setting up the recurring deposit but noted this prior to the audit and made the catch-up payment as required in 2025. Effect: The Project’s replacement reserve was underfunded for the year. Auditor’s Recommendation: Reserve deposits should be made timely. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan.
Finding 2024-004
Finding # 2024-004 – Special Tests and Provisions Repeat Finding: No AL# 14.195 U.S. Department of Housing and Urban Development Questioned Cost: $0 Criteria: For deposits held at institutions which exceed federally insured limits, HUD Handbook 4370.2, paragraph 2-6 requires that the management agent or entity owner monitor the financial institution’s rating on a quarterly basis to ensure consistency with minimally acceptable ratings as established by the Government National Mortgage Association and maintain documentation of the rating for at least 3 years. Condition: Combined deposits on hand at Clinton Savings Bank exceed federally insured limits and no monitoring of the institution was documented.Effect: The assets of the project could be subject to risk. Auditor’s Recommendation: A monitoring policy should be instituted to properly document that balances in excess of FDIC are not subject to significant risk. View of Responsible Officials: Management agrees with the finding and has implemented a corrective action plan. Cause: The account balances at Clinton Savings Bank exceed $250,000 and no formal policy is in place for monitoring.