FAC Explorer

Audit 39156

FY End
2022-12-31
Total Expended
$1.82M
Findings
8
Programs
2
Organization: Berlin Retirement Homes, Inc. (MA)
Year: 2022 Accepted: 2023-08-13
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42478 2022-004 Significant Deficiency - N
42479 2022-002 Significant Deficiency - E
42480 2022-003 Significant Deficiency - E
42481 2022-001 Significant Deficiency - N
618920 2022-004 Significant Deficiency - N
618921 2022-002 Significant Deficiency - E
618922 2022-003 Significant Deficiency - E
618923 2022-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.415 Rural Rental Housing Loans $1.56M Yes 1
14.195 Section 8 Housing Assistance Payments Program $258,131 Yes 3

Contacts

Name Title Type
MJQEUHH4JLB3 Cheryl Sharon Auditee
9788380442 Sheila McNeil Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federalaward activity of Berlin Retirement Homes, Inc. dba Northbrook Village under programs of the federalgovernment for the 15-month period ended December 31, 2022. The information in this schedule ispresented 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 BerlinRetirement Homes, Inc. dba Northbrook Village it is not intended to and does not present the financialposition, changes in net position, or cash flows of Berlin Retirement Homes, Inc. dba NorthbrookVillage. (1) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, whereincertain types of expenditures are not allowable or are limited as to reimbursement.(2) Berlin Retirement Homes, Inc. dba Northbrook Village has not elected to use the 10 percent deminimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 1520300.

Finding Details

Finding 2022-004
AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $3,210 Criteria ? Funds collected as a security deposit shall be kept in the name of the project, separate and apart from all other funds of the project in a trust account. The amount of this account shall always equal or exceed the aggregate of all outstanding obligations under that account. Condition ? The Project?s tenant security deposits cash account did not equal or exceed the tenant security deposit liability. Cause ? The entity switched management companies during the year and security deposits were still in the process of reconciliation as of year-end.Effects or Potential Effects ? The project was not in compliance with requirements set forth by Rural Development. Auditor?s Recommendation ? We recommend regular reconciliation and comparison of the security deposit liability account and the cash account. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-002
AL# 14.195 U.S. Department of Housing and Urban Development Questioned Cost: $0 Criteria ? Tenant file was missing the Enterprise Income Verification (EIV) system report. Condition ? For one file of the four tested, there was no EIV form maintained in the tenant file. Cause ? The entity switched management companies during the year and prior to the new management company the tenant files were inconsistently maintained causing this finding.Effects or Potential Effects ? Tenant files were not complete or maintained in accordance with HUD requirements. Auditor?s Recommendation ? The specific documentation require by HUD should be maintained in the tenant files and the files should be periodically reviewed for completeness. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-003
Questioned Cost: $0 Criteria ? Evidence that two individuals on the waitlist were reached out to sequentially was not maintained. Condition ? In testing the move-ins, wait-list and rejections, evidence could not be provided to support that the next two people on the waitlist were contacted prior to the open unit being offered to the third person in the waitlist. Cause ? The entity switched management companies during the year and, prior to the new management company, documentation around proper ordering of the waitlist was not maintained causing this finding. Effects or Potential Effects ? Waitlist procedures may not have been properly followed or if followed, not appropriately documented. Auditor?s Recommendation ? Maintenance and updates to the waitlist should be documented accordingly. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-001
Questioned Cost: $0 Criteria ? Units that became available during the year were not rented to the required percentage of tenants with extremely low income. Condition ? HUD Section 8 requires at least 40% of the units that become available in the fiscal year be offered to extremely low-income tenants. If the units were actively marketed and the project was unable to achieve the 40% target, the units can be rented to other eligible tenants. During the 15-month period ended December 31, 2022, there were seven units that became available and only one was rented to an extremely low-income tenant. Evidence of proper marketing could not be produced justifying that the lower than 40% could be obtained. Cause ? The entity switched management companies during the year and prior to the new management company the tenant selection plan was inconsistently followed causing this finding. Effects or Potential Effects ? The project did not meet the HUD Section 8 housing requirements. Auditor?s Recommendation ? Resident selection plan should be reviewed and consistently followed. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-004
AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $3,210 Criteria ? Funds collected as a security deposit shall be kept in the name of the project, separate and apart from all other funds of the project in a trust account. The amount of this account shall always equal or exceed the aggregate of all outstanding obligations under that account. Condition ? The Project?s tenant security deposits cash account did not equal or exceed the tenant security deposit liability. Cause ? The entity switched management companies during the year and security deposits were still in the process of reconciliation as of year-end.Effects or Potential Effects ? The project was not in compliance with requirements set forth by Rural Development. Auditor?s Recommendation ? We recommend regular reconciliation and comparison of the security deposit liability account and the cash account. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-002
AL# 14.195 U.S. Department of Housing and Urban Development Questioned Cost: $0 Criteria ? Tenant file was missing the Enterprise Income Verification (EIV) system report. Condition ? For one file of the four tested, there was no EIV form maintained in the tenant file. Cause ? The entity switched management companies during the year and prior to the new management company the tenant files were inconsistently maintained causing this finding.Effects or Potential Effects ? Tenant files were not complete or maintained in accordance with HUD requirements. Auditor?s Recommendation ? The specific documentation require by HUD should be maintained in the tenant files and the files should be periodically reviewed for completeness. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-003
Questioned Cost: $0 Criteria ? Evidence that two individuals on the waitlist were reached out to sequentially was not maintained. Condition ? In testing the move-ins, wait-list and rejections, evidence could not be provided to support that the next two people on the waitlist were contacted prior to the open unit being offered to the third person in the waitlist. Cause ? The entity switched management companies during the year and, prior to the new management company, documentation around proper ordering of the waitlist was not maintained causing this finding. Effects or Potential Effects ? Waitlist procedures may not have been properly followed or if followed, not appropriately documented. Auditor?s Recommendation ? Maintenance and updates to the waitlist should be documented accordingly. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.
Finding 2022-001
Questioned Cost: $0 Criteria ? Units that became available during the year were not rented to the required percentage of tenants with extremely low income. Condition ? HUD Section 8 requires at least 40% of the units that become available in the fiscal year be offered to extremely low-income tenants. If the units were actively marketed and the project was unable to achieve the 40% target, the units can be rented to other eligible tenants. During the 15-month period ended December 31, 2022, there were seven units that became available and only one was rented to an extremely low-income tenant. Evidence of proper marketing could not be produced justifying that the lower than 40% could be obtained. Cause ? The entity switched management companies during the year and prior to the new management company the tenant selection plan was inconsistently followed causing this finding. Effects or Potential Effects ? The project did not meet the HUD Section 8 housing requirements. Auditor?s Recommendation ? Resident selection plan should be reviewed and consistently followed. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.