FAC Explorer

Audit 359185

FY End
2024-12-31
Total Expended
$15.40M
Findings
2
Programs
1
Organization: The Crest at Lakeshore, Llc. Dba: the Crest at Lakeshore (MN)
Year: 2024 Accepted: 2025-06-18
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
565357 2024-001 Material Weakness - N
1141799 2024-001 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $15.40M Yes 1

Contacts

Name Title Type
WU94A6841CY1 Doug Harrison Auditee
8173045727 Nicole Folkerts Auditor
No contacts on file

Notes to SEFA

Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Project 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 2 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. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Section 223(f) HUD-Insured Mortgage Note has an outstanding balance of $15,076,743 at December 31, 2024. De Minimis Rate Used: N Rate Explanation: The Project has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2024-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 223(f) HUD Insured Mortgage Note Listing Number: 14.155 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A FAIN number and year: 708752 / 800235016 - 2020 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: The Project cannot, without the prior written consent of HUD, distribute any funds except for reasonable operating expenses and necessary repairs that are repaid within 30 days. Condition: Management distributed more than the amount available for distribution and therefore unauthorized distributions were paid out. Questioned costs: None Context: The project is allowed to take mid year and annual distributions as long as there is sufficient surplus cash. Cause: The surplus cash calculation did not properly calculate surplus cash resulting in an overdistribution of the funds. Effect: Unauthorized 12/31/23 and 6/30/24 distributions resulting in an overdistribution of $124,109 and $477,792, respectively. No funds need to be paid back as there was surplus cash available at 12/31/24. Repeat Finding: N/A Recommendation: We recommend management ensure they are properly calculating surplus cash and distributing in accordance with the calculation. Views of the responsible official and planned corrective actions: No disagreements with the finding.
Finding 2024-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 223(f) HUD Insured Mortgage Note Listing Number: 14.155 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A FAIN number and year: 708752 / 800235016 - 2020 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: The Project cannot, without the prior written consent of HUD, distribute any funds except for reasonable operating expenses and necessary repairs that are repaid within 30 days. Condition: Management distributed more than the amount available for distribution and therefore unauthorized distributions were paid out. Questioned costs: None Context: The project is allowed to take mid year and annual distributions as long as there is sufficient surplus cash. Cause: The surplus cash calculation did not properly calculate surplus cash resulting in an overdistribution of the funds. Effect: Unauthorized 12/31/23 and 6/30/24 distributions resulting in an overdistribution of $124,109 and $477,792, respectively. No funds need to be paid back as there was surplus cash available at 12/31/24. Repeat Finding: N/A Recommendation: We recommend management ensure they are properly calculating surplus cash and distributing in accordance with the calculation. Views of the responsible official and planned corrective actions: No disagreements with the finding.