FAC Explorer

Audit 357809

FY End
2024-12-31
Total Expended
$5.56M
Findings
6
Programs
2
Organization: Independent Housing Ii, Inc.--Costello House 022-Ee-035 (MA)
Year: 2024 Accepted: 2025-06-02
Auditor: Burkhart Pizzanelli PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
562209 2024-001 - - C
562210 2024-002 Significant Deficiency Yes C
562211 2024-003 - - B
1138651 2024-001 - - C
1138652 2024-002 Significant Deficiency Yes C
1138653 2024-003 - - B

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly, Capital Advance - Accumulated Balance $5.15M Yes 3
14.871 Section 8 Housing Choice Vouchers $407,446 - 0

Contacts

Name Title Type
XVKLMLFQVL78 Bryan Joyce Auditee
4135254321 Julie Quink Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: The schedule of expenditures of federal awards is prepared 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. The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024.The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Independent Housing II, Inc., HUD Project No. 023-EE-035-Costello House. 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 Independent Housing II, Inc., HUD Project No. 023-EE-035-Costello House, it is not intended to and does not present the financial position, change in net assets, or cash flows of Independent Housing II, Inc., HUD Project No. 023-EE-035-Costello House.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The schedule of expenditures of federal awards is prepared 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. The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024.The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The schedule of expenditures of federal awards is prepared 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. The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024.The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024.
Title: DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: The schedule of expenditures of federal awards is prepared 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. The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024.The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Project did not pass-through any federal funds to a subrecipient in 2024. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Section 202 Capital Advance accumulated balance is presented as of January 1, 2024. The Section 202 Capital Advance accumulated balance as of December 31, 2024 was $5,148,400.

Finding Details

Finding 2024-001
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2024-001: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION One of the Project’s bank balances exceeds the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. CRITERIA HUD requires the Project’s bank balances to not exceed the $250,000 FDIC limit due to the risk of loss in the event the bank was to fail. EFFECT OF CONDITION The Project’s accounts with PeoplesBank totaled over the FDIC limit at December 31, 2024. CONTEXT Bank balances were reviewed to ensure the Project is properly managing bank account limits and exposure. Balances at one bank were over the $250,000 limit. CAUSE OF CONDITION The Project’s bank accounts at one bank exceeded the FDIC limit at December 31, 2024. RECOMMENDATION The auditor recommends ensuring all bank account balances at each bank remain below the FDIC limit. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring bank accounts more frequently throughout the year to ensure bank balances do not exceed the FDIC limits.
Finding 2024-002
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-002: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The surplus cash calculated for the year ended December 31, 2024, is required to be deposited by the Project within 60 days after year end. CRITERIA The HUD Audit Guide considers this to be an unauthorized use of project funds. EFFECT OF CONDITION The surplus cash amount of $4,695 was not deposited into the residual receipts account by February 28, 2025. CONTEXT The Project’s surplus cash amount calculated for the year ended December 31, 2024, was required to be deposited by February 28, 2025. CAUSE OF CONDITION The 60-day surplus cash deposit requirement of the Regulatory Agreement was not made on time. The Project did not calculate the correct surplus cash amount for the year ended December 31, 2024, due to late accounting adjustments. RECOMMENDATION The auditor recommends depositing the surplus cash amount of $4,695 into the residual receipts account immediately. The auditor also recommends that the management company continue to monitor the 60 days after year-end deadline and transmit the funds to the residual receipts account prior to this deadline, if applicable, in future years. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS Management has deposited the surplus cash amount of $4,695 into the residual receipts account on March 31, 2025.
Finding 2024-003
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-003: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The Project improperly paid for one expense in the amount of $72 on behalf of another project during the year ended December 31, 2024. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to use funds in accordance with the Regulatory Agreement. EFFECT OF CONDITION The Project used funds to pay for an expense related to another project, which is in the same location as the Project. CONTEXT During the audit process, a sample size of 40 cash disbursements were tested to determine if the funds were properly disbursed in accordance with the Regulatory Agreement. One out of the 40 cash disbursements was not properly disbursed. CAUSE OF CONDITION Management mistakenly did not ensure the correct project was paying the appropriate share of a vendor’s invoice resulting in a payment on behalf of another project of $72. RECOMMENDATION The auditor recommends ensuring all disbursements are thoroughly reviewed prior to authorizing the expense to be paid. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be reimbursed by the other project for the expense paid on its behalf.
Finding 2024-001
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2024-001: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION One of the Project’s bank balances exceeds the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. CRITERIA HUD requires the Project’s bank balances to not exceed the $250,000 FDIC limit due to the risk of loss in the event the bank was to fail. EFFECT OF CONDITION The Project’s accounts with PeoplesBank totaled over the FDIC limit at December 31, 2024. CONTEXT Bank balances were reviewed to ensure the Project is properly managing bank account limits and exposure. Balances at one bank were over the $250,000 limit. CAUSE OF CONDITION The Project’s bank accounts at one bank exceeded the FDIC limit at December 31, 2024. RECOMMENDATION The auditor recommends ensuring all bank account balances at each bank remain below the FDIC limit. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring bank accounts more frequently throughout the year to ensure bank balances do not exceed the FDIC limits.
Finding 2024-002
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-002: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The surplus cash calculated for the year ended December 31, 2024, is required to be deposited by the Project within 60 days after year end. CRITERIA The HUD Audit Guide considers this to be an unauthorized use of project funds. EFFECT OF CONDITION The surplus cash amount of $4,695 was not deposited into the residual receipts account by February 28, 2025. CONTEXT The Project’s surplus cash amount calculated for the year ended December 31, 2024, was required to be deposited by February 28, 2025. CAUSE OF CONDITION The 60-day surplus cash deposit requirement of the Regulatory Agreement was not made on time. The Project did not calculate the correct surplus cash amount for the year ended December 31, 2024, due to late accounting adjustments. RECOMMENDATION The auditor recommends depositing the surplus cash amount of $4,695 into the residual receipts account immediately. The auditor also recommends that the management company continue to monitor the 60 days after year-end deadline and transmit the funds to the residual receipts account prior to this deadline, if applicable, in future years. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS Management has deposited the surplus cash amount of $4,695 into the residual receipts account on March 31, 2025.
Finding 2024-003
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-003: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The Project improperly paid for one expense in the amount of $72 on behalf of another project during the year ended December 31, 2024. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to use funds in accordance with the Regulatory Agreement. EFFECT OF CONDITION The Project used funds to pay for an expense related to another project, which is in the same location as the Project. CONTEXT During the audit process, a sample size of 40 cash disbursements were tested to determine if the funds were properly disbursed in accordance with the Regulatory Agreement. One out of the 40 cash disbursements was not properly disbursed. CAUSE OF CONDITION Management mistakenly did not ensure the correct project was paying the appropriate share of a vendor’s invoice resulting in a payment on behalf of another project of $72. RECOMMENDATION The auditor recommends ensuring all disbursements are thoroughly reviewed prior to authorizing the expense to be paid. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be reimbursed by the other project for the expense paid on its behalf.