FAC Explorer

Audit 365277

FY End
2024-06-30
Total Expended
$770,211
Findings
8
Programs
2
Organization: A & E Association, Inc. 071-Hd092 (IL)
Year: 2024 Accepted: 2025-08-29
Auditor: Sikich CPA LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
575224 2024-002 Material Weakness Yes E
575225 2024-002 Material Weakness Yes E
575226 2024-003 - - N
575227 2024-003 - - N
1151666 2024-002 Material Weakness Yes E
1151667 2024-002 Material Weakness Yes E
1151668 2024-003 - - N
1151669 2024-003 - - N

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities (capital Advance) $683,800 Yes 2
14.181 Supportive Housing for Persons with Disabilities (rental Assistance Payments) $86,411 Yes 2

Contacts

Name Title Type
JBNZJWMA5117 Cherie Martin Auditee
6309664001 Ray Krouse Auditor
No contacts on file

Notes to SEFA

Title: 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: They did not elect to use the 10% federal de minimis indirect cost rate. The schedule of expenditures of federal awards 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 A&E Association, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of A&E Association, Inc.
Title: SECTION 811 CAPITAL ADVANCE 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: They did not elect to use the 10% federal de minimis indirect cost rate. A&E Association, Inc.’s capital advance was funded in prior years and is subject to continuing compliance requirements. The amount has not changed for the year ended June 30, 2024.
Title: OTHER 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: They did not elect to use the 10% federal de minimis indirect cost rate. A&E Association, Inc. did not receive any federal noncash assistance or provide any funding to subrecipients. They also did not have any federal insurance.

Finding Details

Finding 2024-002
2024-002 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 Eligibility - Missing Documentation Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, the following deficiencies were identified – certain tenant files are not kept on file within the required compliance timeframe. We consider this finding to be a material weakness with the Eligibility Compliance Requirement. This finding was repeated from June 30, 2023 and is reported in Section IV-Prior Audit Findings. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistant provided. Cause: The Project experienced operational challenge and staffing transition to outsourced accountants during the period of audit. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance in regard to eligibility and the timeliness of proper tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-002
2024-002 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 Eligibility - Missing Documentation Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, the following deficiencies were identified – certain tenant files are not kept on file within the required compliance timeframe. We consider this finding to be a material weakness with the Eligibility Compliance Requirement. This finding was repeated from June 30, 2023 and is reported in Section IV-Prior Audit Findings. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistant provided. Cause: The Project experienced operational challenge and staffing transition to outsourced accountants during the period of audit. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance in regard to eligibility and the timeliness of proper tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-003
2024-003 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 - Special Tests and Provisions Criteria: The Project is required to collect tenant security deposits and make monthly deposits into the established reserve fund to aid in funding extraordinary maintenance and repair and replacement of capital items. Condition: The project did not collect tenant deposits and make the required monthly deposit of $1,144 into the reserve account during the year. We consider this finding to be an instance of noncompliance with regard to the Special Tests and Provisions compliance requirement. Effect: By not collecting tenant deposits and making monthly deposits it would be possible for the Project to not have funding for capital improvements Questioned Costs: $13,728 Cause: The Project experienced cash shortages in the operating account leading to funds not being available to deposit into the reserve fund. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance regarding special tests and provisions. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-003
2024-003 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 - Special Tests and Provisions Criteria: The Project is required to collect tenant security deposits and make monthly deposits into the established reserve fund to aid in funding extraordinary maintenance and repair and replacement of capital items. Condition: The project did not collect tenant deposits and make the required monthly deposit of $1,144 into the reserve account during the year. We consider this finding to be an instance of noncompliance with regard to the Special Tests and Provisions compliance requirement. Effect: By not collecting tenant deposits and making monthly deposits it would be possible for the Project to not have funding for capital improvements Questioned Costs: $13,728 Cause: The Project experienced cash shortages in the operating account leading to funds not being available to deposit into the reserve fund. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance regarding special tests and provisions. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-002
2024-002 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 Eligibility - Missing Documentation Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, the following deficiencies were identified – certain tenant files are not kept on file within the required compliance timeframe. We consider this finding to be a material weakness with the Eligibility Compliance Requirement. This finding was repeated from June 30, 2023 and is reported in Section IV-Prior Audit Findings. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistant provided. Cause: The Project experienced operational challenge and staffing transition to outsourced accountants during the period of audit. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance in regard to eligibility and the timeliness of proper tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-002
2024-002 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 Eligibility - Missing Documentation Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, the following deficiencies were identified – certain tenant files are not kept on file within the required compliance timeframe. We consider this finding to be a material weakness with the Eligibility Compliance Requirement. This finding was repeated from June 30, 2023 and is reported in Section IV-Prior Audit Findings. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistant provided. Cause: The Project experienced operational challenge and staffing transition to outsourced accountants during the period of audit. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance in regard to eligibility and the timeliness of proper tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-003
2024-003 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 - Special Tests and Provisions Criteria: The Project is required to collect tenant security deposits and make monthly deposits into the established reserve fund to aid in funding extraordinary maintenance and repair and replacement of capital items. Condition: The project did not collect tenant deposits and make the required monthly deposit of $1,144 into the reserve account during the year. We consider this finding to be an instance of noncompliance with regard to the Special Tests and Provisions compliance requirement. Effect: By not collecting tenant deposits and making monthly deposits it would be possible for the Project to not have funding for capital improvements Questioned Costs: $13,728 Cause: The Project experienced cash shortages in the operating account leading to funds not being available to deposit into the reserve fund. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance regarding special tests and provisions. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.
Finding 2024-003
2024-003 ALN# 14.181 Supportive Housing for Persons with Disabilities, June 30, 2024 - Special Tests and Provisions Criteria: The Project is required to collect tenant security deposits and make monthly deposits into the established reserve fund to aid in funding extraordinary maintenance and repair and replacement of capital items. Condition: The project did not collect tenant deposits and make the required monthly deposit of $1,144 into the reserve account during the year. We consider this finding to be an instance of noncompliance with regard to the Special Tests and Provisions compliance requirement. Effect: By not collecting tenant deposits and making monthly deposits it would be possible for the Project to not have funding for capital improvements Questioned Costs: $13,728 Cause: The Project experienced cash shortages in the operating account leading to funds not being available to deposit into the reserve fund. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance regarding special tests and provisions. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.