FAC Explorer

Audit 364212

FY End
2024-09-30
Total Expended
$8.98M
Findings
12
Programs
2
Organization: The Salvation Army Residence Inc., A Florida Corporation (FL)
Year: 2024 Accepted: 2025-08-13
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
573493 2024-002 Material Weakness - N
573494 2024-003 Material Weakness - N
573495 2024-004 Material Weakness - N
573496 2024-002 Material Weakness - N
573497 2024-003 Material Weakness Yes N
573498 2024-004 Material Weakness - N
1149935 2024-002 Material Weakness - N
1149936 2024-003 Material Weakness - N
1149937 2024-004 Material Weakness - N
1149938 2024-002 Material Weakness - N
1149939 2024-003 Material Weakness Yes N
1149940 2024-004 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $6.24M Yes 3
14.182 Lower Income Housing Assistance Program_section 8 New Construction/substantial Rehabilitation $2.75M Yes 3

Contacts

Name Title Type
R26VS46N7RL9 Roland Cox Auditee
4047286700 Amy Blocker Auditor
No contacts on file

Notes to SEFA

Title: Note A - Basis of Presentation Accounting Policies: Note B - Summary of significant accounting policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Salvation Army Residences, Inc., a Florida Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards includes the federal award activity of The Salvation Army Residences, Inc., a Florida Corporation, HUD Project No.: 067-11269, under programs of the federal government for the year ended September 30, 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"). For the year ended September 30, 2024, no awards were passed through to subrecipients.
Title: Note C - U.S. Department of Housing and Urban Development loan program Accounting Policies: Note B - Summary of significant accounting policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Salvation Army Residences, Inc., a Florida Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Salvation Army Residences, Inc., a Florida Corporation has received a U.S. Department of Housing and Urban Development insured loan under Section 223(f) 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. The Corporation received no additional loans during the year. The balance of the loan outstanding at September 30, 2024 consists of: See the Notes to the SEFA for chart/table

Finding Details

Finding 2024-002
Department of Housing and Urban Development Finding 2024-002 Section 8 New Construction and Substantial Rehabilitation, AL 14.182 Statement of Condition During the procedures applied to a sample of two tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of Electronic Income Verification (EIV) information. One instance where EIV information was provided in electronic format to the independent public accountant were noted. Criteria Organization is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Cause Organization employees failed to follow the policies and procedures which have been established for proper dissemination of EIV information in accordance with HUD guidelines and management policies. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned costs: None Context: N/A Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Reporting Views of Responsible Officials We agree with the finding. Personnel have been retrained and the EIV policy and forms have been reviewed.
Finding 2024-003
Department of Housing and Urban Development Finding 2024-003 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $556,647 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on September 20, 2024. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned costs: None Context: N/A Identification as a repeat finding: Yes - 2022-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure this information is captured and deposits are timely made.
Finding 2024-004
Department of Housing and Urban Development Finding 2024-004 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, the project paid management fees of $2,648 in excess of the amount approved by HUD. Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Cause Lack of management oversight with respect to residual receipts HAP offsets caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned costs: $2,682 Context: Management incorrectly overestimated the use of residual receipts HAP offsets, resulting in an overstatement of revenues used to calculate the management fee. Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor any modifications or material changes to revenues that may impact the management fee calculation. Management should pay back the overpaid management fee. Auditor Noncompliance Code: J - Unauthorized management fees Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure we do not overpay management fees in the future.
Finding 2024-002
Department of Housing and Urban Development Finding 2024-002 Section 8 New Construction and Substantial Rehabilitation, AL 14.182 Statement of Condition During the procedures applied to a sample of two tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of Electronic Income Verification (EIV) information. One instance where EIV information was provided in electronic format to the independent public accountant were noted. Criteria Organization is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Cause Organization employees failed to follow the policies and procedures which have been established for proper dissemination of EIV information in accordance with HUD guidelines and management policies. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned costs: None Context: N/A Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Reporting Views of Responsible Officials We agree with the finding. Personnel have been retrained and the EIV policy and forms have been reviewed.
Finding 2024-003
Department of Housing and Urban Development Finding 2024-003 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $556,647 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on September 20, 2024. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned costs: None Context: N/A Identification as a repeat finding: Yes - 2022-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure this information is captured and deposits are timely made.
Finding 2024-004
Department of Housing and Urban Development Finding 2024-004 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, the project paid management fees of $2,648 in excess of the amount approved by HUD. Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Cause Lack of management oversight with respect to residual receipts HAP offsets caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned costs: $2,682 Context: Management incorrectly overestimated the use of residual receipts HAP offsets, resulting in an overstatement of revenues used to calculate the management fee. Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor any modifications or material changes to revenues that may impact the management fee calculation. Management should pay back the overpaid management fee. Auditor Noncompliance Code: J - Unauthorized management fees Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure we do not overpay management fees in the future.
Finding 2024-002
Department of Housing and Urban Development Finding 2024-002 Section 8 New Construction and Substantial Rehabilitation, AL 14.182 Statement of Condition During the procedures applied to a sample of two tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of Electronic Income Verification (EIV) information. One instance where EIV information was provided in electronic format to the independent public accountant were noted. Criteria Organization is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Cause Organization employees failed to follow the policies and procedures which have been established for proper dissemination of EIV information in accordance with HUD guidelines and management policies. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned costs: None Context: N/A Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Reporting Views of Responsible Officials We agree with the finding. Personnel have been retrained and the EIV policy and forms have been reviewed.
Finding 2024-003
Department of Housing and Urban Development Finding 2024-003 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $556,647 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on September 20, 2024. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned costs: None Context: N/A Identification as a repeat finding: Yes - 2022-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure this information is captured and deposits are timely made.
Finding 2024-004
Department of Housing and Urban Development Finding 2024-004 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, the project paid management fees of $2,648 in excess of the amount approved by HUD. Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Cause Lack of management oversight with respect to residual receipts HAP offsets caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned costs: $2,682 Context: Management incorrectly overestimated the use of residual receipts HAP offsets, resulting in an overstatement of revenues used to calculate the management fee. Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor any modifications or material changes to revenues that may impact the management fee calculation. Management should pay back the overpaid management fee. Auditor Noncompliance Code: J - Unauthorized management fees Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure we do not overpay management fees in the future.
Finding 2024-002
Department of Housing and Urban Development Finding 2024-002 Section 8 New Construction and Substantial Rehabilitation, AL 14.182 Statement of Condition During the procedures applied to a sample of two tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of Electronic Income Verification (EIV) information. One instance where EIV information was provided in electronic format to the independent public accountant were noted. Criteria Organization is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Cause Organization employees failed to follow the policies and procedures which have been established for proper dissemination of EIV information in accordance with HUD guidelines and management policies. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned costs: None Context: N/A Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Reporting Views of Responsible Officials We agree with the finding. Personnel have been retrained and the EIV policy and forms have been reviewed.
Finding 2024-003
Department of Housing and Urban Development Finding 2024-003 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $556,647 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on September 20, 2024. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned costs: None Context: N/A Identification as a repeat finding: Yes - 2022-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure this information is captured and deposits are timely made.
Finding 2024-004
Department of Housing and Urban Development Finding 2024-004 Section 223(f) Mortgage Insurance Program AL 14.155 Statement of Condition During the year ended September 30, 2024, the project paid management fees of $2,648 in excess of the amount approved by HUD. Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Cause Lack of management oversight with respect to residual receipts HAP offsets caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned costs: $2,682 Context: Management incorrectly overestimated the use of residual receipts HAP offsets, resulting in an overstatement of revenues used to calculate the management fee. Identification as a repeat finding: No Recommendation Management should establish additional procedures and monitor any modifications or material changes to revenues that may impact the management fee calculation. Management should pay back the overpaid management fee. Auditor Noncompliance Code: J - Unauthorized management fees Reporting Views of Responsible Officials We agree with the finding. We are reviewing our procedures to ensure we do not overpay management fees in the future.