Audit 363016

FY End
2024-06-30
Total Expended
$1.36M
Findings
4
Programs
1
Organization: Heritage Grove Inc. (IL)
Year: 2024 Accepted: 2025-07-25

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
571929 2024-003 Significant Deficiency - N
571930 2024-004 Significant Deficiency - E
1148371 2024-003 Significant Deficiency - N
1148372 2024-004 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $97,432 Yes 1

Contacts

Name Title Type
VAGUR5PV5RC3 Mary Garrison Auditee
2173626262 Cathy Mansur Auditor
No contacts on file

Notes to SEFA

Title: Note A - 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: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Heritage Grove, Inc., HUD Project No. 072-HD109, and is presented on the accrual basis of accounting. 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 Heritage Grove, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Heritage Grove, Inc.
Title: Note B - 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: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. 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: Note C - U.S. Department of Housing and Urban Development Loan Program 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: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Heritage Grove, Inc. has received a U.S. Department of Housing and Urban Development direct loan under Section 811 of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the schedule. Heritage Grove, Inc. received no additional loans during the year. The balance of the loan outstanding at June 30, 2024 consists of: Assistance Listing Number 14.181; Program Name Section 811 Direct Loan; Outstanding Blaance at June 30, 2024 $1,259,195
Title: Note D - 10% De Minimis 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: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

2024 - 003 Replacement Reserve Deposit; Agency: U.S. Department of Housing and Urban Development (HUD); Assistance Listing Number: 14.181; Program: Supportive Housing for Persons with DisabilitiesCriteria: The Project is required to make monthly replacement reserve deposits.; Condition: The Project did not make a required replacement reserve deposit for March 2024.; Cause: Management oversight led to the lack of monthly deposit for March 2024. All other deposits during the year were made timely.; Effect: Failure to make replacement reserve deposits results in noncompliance with the regulatory agreement.; Recommendation: The Project should review its internal control policies to ensure all deposits are made timely.; Management’s Response: Management agrees with the finding.; Actions Taken or Planned on the Finding: The delinquent deposit was made in May 2024. This finding is closed.
2024 - 004 Recertification of Tenant Eligibility and Assistance; Agency: U.S. Department of Housing and Urban Development (HUD); Assistance Listing Number: 14.181; Program: Supportive Housing for Persons with Disabilities; Criteria: HUD requires that controls are implemented to ensure tenant eligibility with HUD requirements.; Condition: Management did not complete reviews of tenant file applications and recertifications during a portion of the year to ensure compliance with HUD eligibility requirements.; Cause: Staff turnover and shortages resulted in the review procedure not being completed.; Effect: The lack of effective review procedures could have resulted in the Project having tenants that did not meet the eligibility requirements. All tenants tested during the audit were eligible to participate in the program.; Questioned Costs: The amount of questioned costs cannot be determined.; Context: We tested 4 of 16 tenant files noting that one of the tenant’s recertifications was not completed by the time required.; Recommendation: We recommend management implement timely review of all tenant files after they have been prepared to ensure all participants in the program meet the eligibility requirements.; Management's Response: Management agrees with the finding.
2024 - 003 Replacement Reserve Deposit; Agency: U.S. Department of Housing and Urban Development (HUD); Assistance Listing Number: 14.181; Program: Supportive Housing for Persons with DisabilitiesCriteria: The Project is required to make monthly replacement reserve deposits.; Condition: The Project did not make a required replacement reserve deposit for March 2024.; Cause: Management oversight led to the lack of monthly deposit for March 2024. All other deposits during the year were made timely.; Effect: Failure to make replacement reserve deposits results in noncompliance with the regulatory agreement.; Recommendation: The Project should review its internal control policies to ensure all deposits are made timely.; Management’s Response: Management agrees with the finding.; Actions Taken or Planned on the Finding: The delinquent deposit was made in May 2024. This finding is closed.
2024 - 004 Recertification of Tenant Eligibility and Assistance; Agency: U.S. Department of Housing and Urban Development (HUD); Assistance Listing Number: 14.181; Program: Supportive Housing for Persons with Disabilities; Criteria: HUD requires that controls are implemented to ensure tenant eligibility with HUD requirements.; Condition: Management did not complete reviews of tenant file applications and recertifications during a portion of the year to ensure compliance with HUD eligibility requirements.; Cause: Staff turnover and shortages resulted in the review procedure not being completed.; Effect: The lack of effective review procedures could have resulted in the Project having tenants that did not meet the eligibility requirements. All tenants tested during the audit were eligible to participate in the program.; Questioned Costs: The amount of questioned costs cannot be determined.; Context: We tested 4 of 16 tenant files noting that one of the tenant’s recertifications was not completed by the time required.; Recommendation: We recommend management implement timely review of all tenant files after they have been prepared to ensure all participants in the program meet the eligibility requirements.; Management's Response: Management agrees with the finding.