FAC Explorer

Audit 382803

FY End
2025-09-30
Total Expended
$2.01M
Findings
1
Programs
2
Organization: Council Groves Apartments, Inc. (MT)
Year: 2025 Accepted: 2026-01-20
Auditor: MRACHEK POPP AND ASSOCIATES PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1169732 2025-002 Material Weakness Yes C

Programs

ALN Program Spent Major Findings
14.134 MORTGAGE INSURANCE RENTAL HOUSING $1.01M Yes 1
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $995,006 Yes 0

Contacts

Name Title Type
H3GQN4M5W8C5 Laurel Kultgen Auditee
5099984455 Abigail Hanser-Greer Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards includes the federal grant activity of Council Groves Apartments, Inc., HUD Project No. 093-11015, 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 Council Groves Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Council Groves Apartments, Inc.
Council Groves Apartments, Inc. has received a U.S. Department of Housing and Urban Development direct loan under Section 207 Pursuant to 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. Council Groves Apartments, Inc. received no additional loans during the year. The balance of the loan outstanding at September 30, 2025 consists of: Federal Assistance Listing Number 14.134; Program Name Section 207 Direct Loan pursuant to Section 223(f); Outstanding Balance at September 30, 2025 $950,751

Finding Details

Finding 2025-002
FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT Department of Housing and Urban Development Finding No. 2025-002, Section 207 Loan Pursuant to Section 223(f) Loan, Federal Assistance Listing Number 14.134 Criteria – HUD regulations and program requirements require that tenant security deposits be maintained in a separate account and fully funded in an amount equal to the related tenant security deposit liability. Statement of condition – The tenant security deposit bank account balance was less than the related tenant security deposit liability as of September 30, 2025. As a result, tenant security deposits were not fully segregated and safeguarded in accordance with applicable HUD requirements. Cause of Condition – The condition appears to be the result of inadequate monitoring and reconciliation of the tenant security deposit account during the fiscal year, including during a transition in property management. Effect of condition – Tenant security deposits were not fully safeguarded at year-end. No federal funds were expended to cover the deficiency, and no questioned costs were identified. Recommendation –Management should ensure that the tenant security deposit bank account is fully funded at all times and reconciled on a regular basis to the related liability balance. Management Response - Management agrees with the finding. Subsequent to year end, on December 12, 2025, the property manager transferred funds into the tenant security deposit bank account to fully fund the account in an amount equal to the related tenant security deposit liability. Management has implemented procedures to ensure the tenant security deposit account is reconciled regularly and maintained at a fully funded level going forward.