Audit 387793

FY End
2024-06-30
Total Expended
$2.99M
Findings
1
Programs
2
Year: 2024 Accepted: 2026-02-18

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
1174137 2024-001 Material Weakness Yes E

Programs

ALN Program Spent Major Findings
14.239 HOME FUND PROGRAM $2.29M Yes 1
14.275 NATIONAL HOUSING TRUST PROGRAM $700,000 Yes 0

Contacts

Name Title Type
N4FWJ33NT8Q5 Sherrilyn McPherson Auditee
9737444141 Kathryn Perry Auditor
No contacts on file

Notes to SEFA

The accompanying Schedule of Expenditures of Federal Awards, (the "Schedule"), includes the federal awards activity of Homes of Montclair Ecumenical Corp., under programs of the federal government for the year ended June 30, 2024. All financial awards received directly from federal agencies as well as financial awards passed through other governmental agencies or not-for-profit organizations are included on the schedule. The information in the 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 Homes of Montclair Ecumenical Corp., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Homes of Montclair Ecumenical Corp.
The Schedule is presented using the accrual basis of accounting. The amounts recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and/or OMB Circular A-122, Cost Principles for Non- profit Organizations where certain types of expenditures are not allowable or are limited as to reimbursement. If present, negative amounts reflected in the schedule represent adjustments or credit resulting from the normal course of business to amounts reported as expenditures in prior years. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal and funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. The schedule includes certain federal loan programs administered by federal agencies, see note 6 below.
The Schedule is presented for purposes of additional analysis as required by the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and is not a required part of the basic financial statements. Federal expenditures reported on the Schedule consist solely of federal loan programs. Loan proceeds received during the year and loan balances outstanding at year end are included on the Schedule in accordance with the Uniform Guidance. Federal loan proceeds reported on the Schedule are included in mortgages payable on the accompanying statement of financial position. The outstanding loan balances disclosed on the Schedule at year end agree to the amounts reported as mortgages payable in the basic financial statements. There were no federal grant expenditures reported in the Schedule for the year ended June 30, 2024.
Homes of Montclair Ecumenical Corp. has elected not to use the 10% de minimus indirect cost rates as allowed under Uniform Guidance.
During the year ended June 30, 2024, the Organization did not provide any funds relating to their programs to subrecipients.
The Organization had the following balances on its federal loans outstanding as of June 30, 2024: Home Program Funds $ 200,000 Home Program Funds 17,477 Home Program Funds 56,700 Home Program Funds 80,000 Home Program Funds 251,740 Home Program Funds 90,006 NJDCA, original loan $854,500, plus accrued interest 1,022,147 NJDCA, original loan $503,480 plus accrued interest 576,803 NJDCA, National Housing Trust Fund 700,000 $ 2,994,873

Finding Details

Reference Number 2024-001 - Eligibility Finding Federal Awards Finding – Significant Deficiency - Eligibility Federal Programs: Home Investment Partnership Program Assistance Listing Number 14.239 Department of Housing and Urban Development Condition: During our testing of tenant eligibility and rent compliance under the HOME Investment Partnerships Program, we noted one instance in which a tenant's income exceeded the HUDestablished income limits. Despite the tenant becoming overincome, the Organization did not adjust the tenant’s rent in accordance with HUD regulations. The tenant continued to pay rent at a rate below the allowable adjusted rent level. Criteria: In accordance with 24 CFR § 92.252(i), if a tenant in a HOMEassisted unit becomes over-income (i.e., their income exceeds 80% of Area Median Income), the Organization must adjust the tenant’s rent to 30% of their adjusted monthly income or take other steps to ensure compliance. This ensures that the HOME program continues to meet affordability requirements and remains in compliance with federal regulations. Cause: The Organization did not have a procedure in place to monitor tenant income changes. Additionally, there was a lack of understanding by property management staff regarding the regulatory requirement to adjust rent when a tenant becomes over-income. Effect: As a result, the Organization was not in compliance with HUD rent limitation requirements, and the affected tenant continued to occupy a HOME-assisted unit at a rent level that did not meet program guidelines. This noncompliance could jeopardize the affordability status of the unit and overall project compliance under the HOME program. 2024-001 - Eligibility Finding Federal Awards Finding – Significant Deficiency - Eligibility Federal Programs: Home Investment Partnership Program Assistance Listing Number 14.239 Department of Housing and Urban Development Recommendation: We recommend the Organization implement controls to monitor and recertify tenant income annually, and to take appropriate action when tenants become over-income, including adjusting tenant rent. Staff involved in property management should receive ongoing training on HOME compliance requirements, particularly those relating to income eligibility and rent limits. Response: Management concurs with the finding. The Organization revised its tenant monitoring procedures to ensure timely annual recertification of income and compliance with HUD rent adjustment requirements. Training is being provided to all property management staff, and management has implemented procedures to ensure all required actions are taken when a tenant becomes over-income. As of December 14, 2024 lease agreements have been updated to include language that states once a tenant is over the income limit, they are considered ineligible and their rent will immediately be adjusted to the HUD market rent.