Audit 385880

FY End

2025-09-30

Total Expended

$4.40M

Findings

1

Programs

1

Organization: Satellite Senior Homes Newark Gardens Ii, Inc. (CA)

Year: 2025 Accepted: 2026-02-05

Auditor: APRIO LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
1172610	2025-001	Material Weakness	Yes	E

ALN	Program	Spent	Major	Findings
14.157	SUPPORTIVE HOUSING FOR THE ELDERLY	$270,253	Yes	0

Contacts

Name	Title	Type
FQ53UDHBVFJ1	Jose Sanchez	Auditee
5106470700	Courtney Sharp	Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Satellite Senior Homes Newark Gardens II, Inc. under programs of the federal government as of and for the year ended September 30, 2025. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Corporation, it is not intended to and does not present the financial position, changes in net assets or cash flows of Satellite Senior Homes Newark Gardens II, Inc..

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Satellite Senior Homes Newark Gardens II, Inc. has elected not to use the 15% de minimis indirect cost rate allowed under Uniform Guidance.

Satellite Senior Homes Newark Gardens II, Inc. has received a capital advance under the Section 202 Capital Advance program. The full amount received under the capital advance of $4,129,900 is included in the federal expenditures presented on the Schedule.

Finding Details

Finding 2025-001

Finding 2025-001: Reportable Finding Considered a Significant Deficiency - Eligibility Program name: Supportive Housing for Elderly Assistance Listing: 14.157 Federal award Identification number: 121-EE015 Federal award year: 2025 Federal awarding agency: U.S. Department of Housing and Urban Development (HUD) Criteria: The Project Rental Assistance Contract requires that rental subsidy claims be based on the HUD-approved contract rent for each unit. Under 2 CFR 200.403(a), costs must be “necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.” Condition: Two of seven units tested were billed at rates exceeding the HUD-approved contract rent, resulting in overcharges to the Federal program. Cause: Internal controls over compliance with program compliance requirements are not operating effectively. Effect or Potential Effect: Overbilling resulted in unallowable costs charged to the Federal award, which may require repayment and could affect future funding. Known Questioned Costs Known questioned costs total $52,780, calculated as the difference between the approved contract rent and the billed amount for all units overcharged. Repeat finding: This is not a repeat finding. Perspective: Our sample included 7 units out of a population of 50 units; 2 errors were noted, indicating a potential systemic issue. Recommendation: We recommend the Owner/Agent: 1) Implement a review process to verify billed subsidy amounts against the approved contract rent schedule; 2) Train staff on compliance with the Project Rental Assistance Contract and 2 CFR 200 cost principles; and 3) Reimburse the Federal program for identified overcharges. Management’s response and corrective action plan (unaudited): Management at SAHA PM notes its responsibility to establish and maintain effective internal control over financial reporting to provide reasonable assurance that transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements in accordance with generally accepted accounting principles (“GAAP”). We plan to establish a checklist for the property accounting team that includes a comparison of gross rent potential to the HUD approved rent schedule.