FAC Explorer

Audit 364065

FY End
2024-06-30
Total Expended
$1.09M
Findings
12
Programs
1
Organization: Sunrise Residential, Inc. (IL)
Year: 2024 Accepted: 2025-08-11
Auditor: Tidwell Group LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
573270 2024-001 Material Weakness - L
573271 2024-001 Material Weakness - L
573272 2024-002 Significant Deficiency - N
573273 2024-002 Significant Deficiency - N
573274 2024-003 Significant Deficiency - A
573275 2024-003 Significant Deficiency - A
1149712 2024-001 Material Weakness - L
1149713 2024-001 Material Weakness - L
1149714 2024-002 Significant Deficiency - N
1149715 2024-002 Significant Deficiency - N
1149716 2024-003 Significant Deficiency - A
1149717 2024-003 Significant Deficiency - A

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $121,759 Yes 3

Contacts

Name Title Type
U42NDK37MJC8 Billie Williams Auditee
7086472826 Scott Reeves Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - 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 OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Sunrise Residential, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of Sunrise Residential, Inc., HUD Project No. 071-HD061, 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 (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 Sunrise Residential, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Sunrise Residential, Inc..
Title: NOTE 2 - 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 OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Sunrise Residential, Inc. has elected not to use the 10 percent de minimus indirect cost rate as 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 OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Sunrise Residential, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 3 - CAPITAL ADVANCE 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 OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Sunrise Residential, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. Sunrise Residential, Inc. has received a capital grant advances under the U.S. Department of Housing and Urban Development’s Supportive Housing for Persons with Disabilities Section 811 Capital Advance Program. The capital advance is treated as a loan program for reporting federal expenditures. The capital advance outstanding at the beginning of the year is included in the federal expenditures presented in the schedule of expenditures of federal awards. Sunrise Residential, Inc. received no additional advances and made no payments during the year ended June 30, 2024. The balance of the capital advance outstanding at June 30, 2024 was $970,600.

Finding Details

Finding 2024-001
Finding 2024-001: Reporting Requirements Statement of Condition Sunrise Residential, Inc. did not submit its audited financial statements, SEFA, and other required information to the Federal Audit Clearinghouse by the required due dates. Criteria Sunrise Residential, Inc. is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse. All items are required to be submitted to the Federal Audit Clearinghouse within nine (9) months after Sunrise Residential, Inc.’s fiscal year-end. Effect Noncompliance with financial reporting deadlines could cause funding sources for Sunrise Residential, Inc. to suspend funding until compliance is achieved. Cause The audit work extended beyond the federal single audit deadline due to delays in starting the audit work because of turnover and prior year audit delays. Questioned Costs None noted. Recommendation We recommend that Sunrise Residential, Inc. begin the audit earlier in order to avoid this issue going forward. Auditor Noncompliance Code S – Internal Control Deficiencies View of Responsible Officials Management concurs with the finding and notes that the Organization has hired the appropriate staff and service organizations to complete the audit in a timely manner.
Finding 2024-001
Finding 2024-001: Reporting Requirements Statement of Condition Sunrise Residential, Inc. did not submit its audited financial statements, SEFA, and other required information to the Federal Audit Clearinghouse by the required due dates. Criteria Sunrise Residential, Inc. is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse. All items are required to be submitted to the Federal Audit Clearinghouse within nine (9) months after Sunrise Residential, Inc.’s fiscal year-end. Effect Noncompliance with financial reporting deadlines could cause funding sources for Sunrise Residential, Inc. to suspend funding until compliance is achieved. Cause The audit work extended beyond the federal single audit deadline due to delays in starting the audit work because of turnover and prior year audit delays. Questioned Costs None noted. Recommendation We recommend that Sunrise Residential, Inc. begin the audit earlier in order to avoid this issue going forward. Auditor Noncompliance Code S – Internal Control Deficiencies View of Responsible Officials Management concurs with the finding and notes that the Organization has hired the appropriate staff and service organizations to complete the audit in a timely manner.
Finding 2024-002
Finding 2024-002: Delinquent deposits to the replacement reserve Statement of Condition During the year ended June 30, 2024, the Project did not make all of the required monthly deposits to the replacement reserve. The Project is required to make monthly deposits of $1,915, or $22,980 annually. During the year ended June 30, 2024, the Project deposited $20,064 to the replacement reserve. Therefore, the replacement reserve was underfunded by $2,916 for the year ended June 30, 2024. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Cause There were not proper internal controls in place to ensure monthly replacement reserve deposits in the amount required by the HAP contract. Questioned Costs None noted. Recommendation Management should review the project budget to determine of nonessential costs can be cut (or request a loan from the owner) to ensure that the replacement reserve is funded in accordance with the terms of the HAP contract. Auditor Noncompliance Code N – Reserve for replacements deposits View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure monthly replacement reserve deposits are made in accordance with the terms of the HAP contract.
Finding 2024-002
Finding 2024-002: Delinquent deposits to the replacement reserve Statement of Condition During the year ended June 30, 2024, the Project did not make all of the required monthly deposits to the replacement reserve. The Project is required to make monthly deposits of $1,915, or $22,980 annually. During the year ended June 30, 2024, the Project deposited $20,064 to the replacement reserve. Therefore, the replacement reserve was underfunded by $2,916 for the year ended June 30, 2024. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Cause There were not proper internal controls in place to ensure monthly replacement reserve deposits in the amount required by the HAP contract. Questioned Costs None noted. Recommendation Management should review the project budget to determine of nonessential costs can be cut (or request a loan from the owner) to ensure that the replacement reserve is funded in accordance with the terms of the HAP contract. Auditor Noncompliance Code N – Reserve for replacements deposits View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure monthly replacement reserve deposits are made in accordance with the terms of the HAP contract.
Finding 2024-003
Finding 2024-003: Unauthorized loans from project assets Statement of Condition During the procedures applied to a sample of 25 cash disbursements, we noted one instance of noncompliance with HUD regulations regarding use of project assets. Based on the results of sampling, during the year ended June 30, 2024, the project paid expenses in the amount of $515 on behalf of an affiliate from project cash without HUD approval for expenses improperly coded to the project. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $515 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Questioned Costs $515. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code G – Unauthorized loans from project assets View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure cash disbursements of project funds are limited to project operating costs. Expense paid from project funds will be reimbursed to the project.
Finding 2024-003
Finding 2024-003: Unauthorized loans from project assets Statement of Condition During the procedures applied to a sample of 25 cash disbursements, we noted one instance of noncompliance with HUD regulations regarding use of project assets. Based on the results of sampling, during the year ended June 30, 2024, the project paid expenses in the amount of $515 on behalf of an affiliate from project cash without HUD approval for expenses improperly coded to the project. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $515 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Questioned Costs $515. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code G – Unauthorized loans from project assets View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure cash disbursements of project funds are limited to project operating costs. Expense paid from project funds will be reimbursed to the project.
Finding 2024-001
Finding 2024-001: Reporting Requirements Statement of Condition Sunrise Residential, Inc. did not submit its audited financial statements, SEFA, and other required information to the Federal Audit Clearinghouse by the required due dates. Criteria Sunrise Residential, Inc. is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse. All items are required to be submitted to the Federal Audit Clearinghouse within nine (9) months after Sunrise Residential, Inc.’s fiscal year-end. Effect Noncompliance with financial reporting deadlines could cause funding sources for Sunrise Residential, Inc. to suspend funding until compliance is achieved. Cause The audit work extended beyond the federal single audit deadline due to delays in starting the audit work because of turnover and prior year audit delays. Questioned Costs None noted. Recommendation We recommend that Sunrise Residential, Inc. begin the audit earlier in order to avoid this issue going forward. Auditor Noncompliance Code S – Internal Control Deficiencies View of Responsible Officials Management concurs with the finding and notes that the Organization has hired the appropriate staff and service organizations to complete the audit in a timely manner.
Finding 2024-001
Finding 2024-001: Reporting Requirements Statement of Condition Sunrise Residential, Inc. did not submit its audited financial statements, SEFA, and other required information to the Federal Audit Clearinghouse by the required due dates. Criteria Sunrise Residential, Inc. is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse. All items are required to be submitted to the Federal Audit Clearinghouse within nine (9) months after Sunrise Residential, Inc.’s fiscal year-end. Effect Noncompliance with financial reporting deadlines could cause funding sources for Sunrise Residential, Inc. to suspend funding until compliance is achieved. Cause The audit work extended beyond the federal single audit deadline due to delays in starting the audit work because of turnover and prior year audit delays. Questioned Costs None noted. Recommendation We recommend that Sunrise Residential, Inc. begin the audit earlier in order to avoid this issue going forward. Auditor Noncompliance Code S – Internal Control Deficiencies View of Responsible Officials Management concurs with the finding and notes that the Organization has hired the appropriate staff and service organizations to complete the audit in a timely manner.
Finding 2024-002
Finding 2024-002: Delinquent deposits to the replacement reserve Statement of Condition During the year ended June 30, 2024, the Project did not make all of the required monthly deposits to the replacement reserve. The Project is required to make monthly deposits of $1,915, or $22,980 annually. During the year ended June 30, 2024, the Project deposited $20,064 to the replacement reserve. Therefore, the replacement reserve was underfunded by $2,916 for the year ended June 30, 2024. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Cause There were not proper internal controls in place to ensure monthly replacement reserve deposits in the amount required by the HAP contract. Questioned Costs None noted. Recommendation Management should review the project budget to determine of nonessential costs can be cut (or request a loan from the owner) to ensure that the replacement reserve is funded in accordance with the terms of the HAP contract. Auditor Noncompliance Code N – Reserve for replacements deposits View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure monthly replacement reserve deposits are made in accordance with the terms of the HAP contract.
Finding 2024-002
Finding 2024-002: Delinquent deposits to the replacement reserve Statement of Condition During the year ended June 30, 2024, the Project did not make all of the required monthly deposits to the replacement reserve. The Project is required to make monthly deposits of $1,915, or $22,980 annually. During the year ended June 30, 2024, the Project deposited $20,064 to the replacement reserve. Therefore, the replacement reserve was underfunded by $2,916 for the year ended June 30, 2024. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Cause There were not proper internal controls in place to ensure monthly replacement reserve deposits in the amount required by the HAP contract. Questioned Costs None noted. Recommendation Management should review the project budget to determine of nonessential costs can be cut (or request a loan from the owner) to ensure that the replacement reserve is funded in accordance with the terms of the HAP contract. Auditor Noncompliance Code N – Reserve for replacements deposits View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure monthly replacement reserve deposits are made in accordance with the terms of the HAP contract.
Finding 2024-003
Finding 2024-003: Unauthorized loans from project assets Statement of Condition During the procedures applied to a sample of 25 cash disbursements, we noted one instance of noncompliance with HUD regulations regarding use of project assets. Based on the results of sampling, during the year ended June 30, 2024, the project paid expenses in the amount of $515 on behalf of an affiliate from project cash without HUD approval for expenses improperly coded to the project. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $515 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Questioned Costs $515. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code G – Unauthorized loans from project assets View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure cash disbursements of project funds are limited to project operating costs. Expense paid from project funds will be reimbursed to the project.
Finding 2024-003
Finding 2024-003: Unauthorized loans from project assets Statement of Condition During the procedures applied to a sample of 25 cash disbursements, we noted one instance of noncompliance with HUD regulations regarding use of project assets. Based on the results of sampling, during the year ended June 30, 2024, the project paid expenses in the amount of $515 on behalf of an affiliate from project cash without HUD approval for expenses improperly coded to the project. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $515 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Questioned Costs $515. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code G – Unauthorized loans from project assets View of Responsible Officials Management concurs with the finding and will review internal control policies to ensure cash disbursements of project funds are limited to project operating costs. Expense paid from project funds will be reimbursed to the project.