FAC Explorer

Audit 384739

FY End
2025-06-30
Total Expended
$7.59M
Findings
2
Programs
1
Organization: Vista Prairie at Garnette Gardens (MN)
Year: 2025 Accepted: 2026-01-30
Auditor: EIDE BAILLY LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1171709 2025-001 Material Weakness Yes A
1171710 2025-002 Material Weakness Yes A

Programs

ALN Program Spent Major Findings
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $7.59M Yes 2

Contacts

Name Title Type
TTG3YF6ANGK3 Dewey Pettit Auditee
9528287112 Mollee Perkins Auditor
No contacts on file

Notes to SEFA

The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Vista Prairie at Garnette Gardens, LLC (the Project) under programs of the Federal Government for the year ended June 30, 2025. The information 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 the Project, it is not intended to, and does not present the financial position, changes in net assets, or cash flows of the Project.
Expenditures reported in 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. The Project’s summary of significant accounting policies is presented in Note 1 in the Project’s basic financial statements. The Project received federal awards directly from federal agencies. No federal financial assistance has been provided to a subrecipient.
The Project does not draw for indirect administrative costs and has not elected to use the 10% de minimis cost rate.
Expenditures reported in this Schedule consist of the beginning of the year outstanding loan balance. The outstanding balance at June 30, 2025, was $7,507,050.

Finding Details

Finding 2025-001
Preparation of Financial Statements Significant Deficiency in Internal Control over Financial Reporting Criteria: Proper controls over financial reporting include a system designed to provide for the preparation of the accompanying financial statements and notes to the financial statements that are materially correct and include all required disclosures in accordance with accounting principles generally accepted in the United States. Condition: The Project does not have an internal control system designed to provide for the preparation of the full financial statements being audited. We were requested to draft the financial statements and accompanying notes to the financial statements. Cause: The Project has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that the Project would not be able to draft the financial statements and the accompanying notes to the financial statements without the assistance of the auditors. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Management and those charged with governance should make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Views of Responsible Officials: Management agrees with the finding.
Finding 2025-002
U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multifamily Housing Projects Special Tests and Provisions – Distribution of Project Funds Significant Deficiency in Internal Control over Compliance Criteria: The Project shall not allow any affiliate to receive or retain any distribution of assets except from surplus cash. Condition: Cash distributions were made to affiliated organizations in the amount of $95,000, which is approximately $23,000 in excess of the calculated surplus cash of $72,109. Cause: The Project did not have an internal control process in place to ensure that the surplus cash distribution was made in accordance with the regulatory agreement. Effect: Cash distributions were made in excess of the amount of allowable distributions. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Testing consisted of reviewing cash distributions for the year and compared to available surplus cash. Repeat Finding from Prior Year: No Recommendation: We recommend that controls be implemented to prevent excess cash distributions from being made after the semi-annual and annual surplus cash calculations are prepared. Views of Responsible Officials: Management agrees with the finding.