Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 C. Findings and Questioned Costs - Major Federal Award Programs Audit Questioned Costs DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Hill Housing Facility FINDING 2022-001: SECTION 8, ASSISTANCE LISITNG NUMBER 14.195 Condition: The Project did not deposit surplus cash at December 31, 2021 into a residual receipts account. The amount that should have been deposited was $14,079. Criteria: The Project should have deposited surplus cash at December 31, 2021 into a residual receipts account. Effect: The residual receipts account balance was $14,079 less than it should be at December 31, 2022. Context: Activity in the residual receipts account for the year ended December 31, 2022 was tested. No sample was tested. Questioned Costs $14,079 Cause: The Project did not make the necessary deposit of surplus cash into a residual receipts account. Recommendation: The Project should deposit surplus cash as of December 31, 2021 into a residual receipt account as soon as possible. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $14,079 into a residual receipts account as soon as possible. Total - Department of Housing and Urban Development $14,079 Non-compliance code - B
Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Hill Housing Facility Questioned Costs FINDING 2022-002: SECTION 8, ASSISTANCE LISITNG NUMBER 14.195 Condition: The Project repaid a portion of the sponsor loan payable (Due to Related Party) without obtaining HUD approval. The total amount of the unauthorized sponsor loan payment was $130,019. Criteria: HUD approval should be obtained prior to making a sponsor loan repayment. Effect: The Project's cash balance is $130,019 less than it should be. Context: The Sponsor loan payable at December 31, 2022 was tested. The test determined that a portion of the sponsor loan was repaid without obtaining HUD approval. Questioned Costs $130,019 Cause: The Project repaid a portion of the sponsor loan without obtaining HUD approval. Recommendation: The Sponsor should work with HUD to determine if the $130,019 needs to be paid back to the Project. Views of Responsible Officials and Planned Corrective Actions: The Sponsor will work with HUD to detemine if the $130,019 needs to be paid back to the Project. Total - Department of Housing and Urban Development $130,019 Non-compliance code - R
Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Rockford Supportive Housing Facility Questioned Costs FINDING 2022-003: SECTION 811, ASSISTANCE LISITNG NUMBER 14.181 Condition: The Project took a HUD subsidy loan from replacement reserves of $15,000 and failed to repay the loan based upon the terms of the agreement with HUD. Criteria: The Project should have repaid the required amount to replacement reserves. Effect: The replacement reserve balance was underfunded by $15,000 at December 31, 2022. Context: All elements of the replacement reserve account were tested at December 31, 2022. No sample was selected. Questioned Costs $15,000 Cause: The Project neglected to repay the HUD subsidy loan based upon the terms of the agreement. Recommendation: The Project should repay the HUD subsidy loan as soon as funds are available. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. A $15,000 transfer will be made once funds are available. Management will be reminded to carefully review HUD correspondence to make sure HUD subsidy loan terms are being followed. Total - Department of Housing and Urban Development $15,000 Non-compliance code - N
Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 C. Findings and Questioned Costs - Major Federal Award Programs Audit Questioned Costs DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Hill Housing Facility FINDING 2022-001: SECTION 8, ASSISTANCE LISITNG NUMBER 14.195 Condition: The Project did not deposit surplus cash at December 31, 2021 into a residual receipts account. The amount that should have been deposited was $14,079. Criteria: The Project should have deposited surplus cash at December 31, 2021 into a residual receipts account. Effect: The residual receipts account balance was $14,079 less than it should be at December 31, 2022. Context: Activity in the residual receipts account for the year ended December 31, 2022 was tested. No sample was tested. Questioned Costs $14,079 Cause: The Project did not make the necessary deposit of surplus cash into a residual receipts account. Recommendation: The Project should deposit surplus cash as of December 31, 2021 into a residual receipt account as soon as possible. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $14,079 into a residual receipts account as soon as possible. Total - Department of Housing and Urban Development $14,079 Non-compliance code - B
Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Hill Housing Facility Questioned Costs FINDING 2022-002: SECTION 8, ASSISTANCE LISITNG NUMBER 14.195 Condition: The Project repaid a portion of the sponsor loan payable (Due to Related Party) without obtaining HUD approval. The total amount of the unauthorized sponsor loan payment was $130,019. Criteria: HUD approval should be obtained prior to making a sponsor loan repayment. Effect: The Project's cash balance is $130,019 less than it should be. Context: The Sponsor loan payable at December 31, 2022 was tested. The test determined that a portion of the sponsor loan was repaid without obtaining HUD approval. Questioned Costs $130,019 Cause: The Project repaid a portion of the sponsor loan without obtaining HUD approval. Recommendation: The Sponsor should work with HUD to determine if the $130,019 needs to be paid back to the Project. Views of Responsible Officials and Planned Corrective Actions: The Sponsor will work with HUD to detemine if the $130,019 needs to be paid back to the Project. Total - Department of Housing and Urban Development $130,019 Non-compliance code - R
Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Rockford Supportive Housing Facility Questioned Costs FINDING 2022-003: SECTION 811, ASSISTANCE LISITNG NUMBER 14.181 Condition: The Project took a HUD subsidy loan from replacement reserves of $15,000 and failed to repay the loan based upon the terms of the agreement with HUD. Criteria: The Project should have repaid the required amount to replacement reserves. Effect: The replacement reserve balance was underfunded by $15,000 at December 31, 2022. Context: All elements of the replacement reserve account were tested at December 31, 2022. No sample was selected. Questioned Costs $15,000 Cause: The Project neglected to repay the HUD subsidy loan based upon the terms of the agreement. Recommendation: The Project should repay the HUD subsidy loan as soon as funds are available. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. A $15,000 transfer will be made once funds are available. Management will be reminded to carefully review HUD correspondence to make sure HUD subsidy loan terms are being followed. Total - Department of Housing and Urban Development $15,000 Non-compliance code - N