FAC Explorer

Audit 3971

FY End
2022-06-30
Total Expended
$5.19M
Findings
8
Programs
5
Organization: Lokahi Pacific and Affiliates (HI)
Year: 2022 Accepted: 2023-11-21
Auditor: Carbonaro CPAS & Management Group

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
2320 2022-002 - - E
2321 2022-003 Material Weakness - P
2322 2022-002 - - E
2323 2022-003 Material Weakness - P
578762 2022-002 - - E
578763 2022-003 Material Weakness - P
578764 2022-002 - - E
578765 2022-003 Material Weakness - P

Programs

ALN Program Spent Major Findings
14.181 Supportive Housing for Persons with Disabilities $3.48M Yes 2
10.767 Intermediary Relending Program $735,284 - 0
14.195 Section 8 Housing Assistance Payments Program $528,086 - 2
10.766 Community Facilities Loans and Grants $304,788 - 0
14.157 Supportive Housing for the Elderly $142,291 - 0

Contacts

Name Title Type
LSCFECCMGWH6 Susie Thieman Auditee
8082425761 Jennifer Schoeppner Auditor
No contacts on file

Notes to SEFA

Title: Note A. BASIS OF PRESENTATION Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of Lokahi Pacific and Affiliates under programs of the Federal government for the year ended June 30, 2022. 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 Lokahi Pacific and Affiliates it is not intended to and does not present the combined financial position, changes in net assets, or cash flows of Lokahi Pacific and Affiliates.
Title: Note B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate.
Title: Note C. SECTION 202 AND 811 CAPITAL ADVANCES Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a Capital advances awarded under Section 202 and 811 do not bear interest and need not be repaid as long as the housing remains available to elderly or disabled persons for at least 40 years. Failure to comply with this requirement could result in HUD billing the Organization for the entire capital advance outstanding plus interest since the date of the first advance. These requirements expire in 2034 and 2044. Federal Program Award Listing Identifying Number Amount Supportive Housing for Persons with Disabilities 14.181 140-HD011-WPD KHUD $ 1,163,500 Supportive Housing for Persons with Disabilities 14.181 140-HD015-NP-WAH HUDII 2,317,400 $ 3,480,900
Title: Note D. SECTION 202 DIRECT LOAN PROGRAM FOR HOUSING FOR THE ELDERLY OR DISABLED Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a Federal Program Award Listing Identifying Number Amount Supportive Housing for the Elderly 14.157 140-EH016-WHH-68 HUDI $ 142,291 $ 142,291
Title: Note E. SUMMARY OF LOAN ACTIVITY Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a Supportive Housing for the Elderly loan balance outstanding at June 30, 2021 $ 142,291 Payments on the loan (41,641) Supportive Housing for the Elderly loan balance outstanding at June 30, 2022 $ 100,650 Community Facilities Loans and Grants loan balance outstanding at June 30, 2021 $ 304,788 Payments on the loan (36,557) Community Facilities Loans and Grants loan balance outstanding at June 30, 2022 $ 268,231 Intermediary Relending Program loan balance outstanding at June 30, 2021 $ 735,284 Payments on the loan (37,721) Intermediary Relending Program loan balance outstanding at June 30, 2022 $ 697,563
Title: Note F. SUBRECIPIENT PASS THROUGH AWARDS Accounting Policies: Basis of Accounting: Expenditures reported on this Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Cost Principles for Nonprofit Organizations and the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate: The Organization has not elected to use the 10% de minimis cost rate. De Minimis Rate Used: N Rate Explanation: n/a No federal awards were passed through to sub-recipients.

Finding Details

Finding 2022-002
Finding 2022-002 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: Annual eligibility and income recertification were not consistently documented and/or not completed timely. Criteria: Annual reexamination of incomes of households occupying assisted units must be completed. Context and Cause of Condition: A sample of tenant files were selected to verify that annual reexamination of incomes were completed. Documentation to support the process was completed was noted to be missing for some files. There is currently no process implemented to monitor the compliance requirement functions being performed by responsible staff. Potential Effect: Future tenant assistance payments may be disallowed. Questioned Costs: None Recommendation: Management should implement a process that provides for monitoring of all functions performed by responsible staff, especially as it relates to compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-003
Finding 2022-003 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: A general lack of oversight of the position that is responsible for duties that are significantly related to maintaining compliance with HUD requirements exists. This is indicative of missing control(s). Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Criteria: Lokahi Pacific and Affiliates must implement internal controls that provide for timely prevention, detection and correction over compliance. Context and Cause of Condition: There is currently no process implemented to monitor the performance of significant processes being performed by staff. Potential Effect: Continued noncompliance with HUD requirements and the potential that future HUD support could be discontinued. Questioned Costs: None Recommendation: Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-002
Finding 2022-002 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: Annual eligibility and income recertification were not consistently documented and/or not completed timely. Criteria: Annual reexamination of incomes of households occupying assisted units must be completed. Context and Cause of Condition: A sample of tenant files were selected to verify that annual reexamination of incomes were completed. Documentation to support the process was completed was noted to be missing for some files. There is currently no process implemented to monitor the compliance requirement functions being performed by responsible staff. Potential Effect: Future tenant assistance payments may be disallowed. Questioned Costs: None Recommendation: Management should implement a process that provides for monitoring of all functions performed by responsible staff, especially as it relates to compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-003
Finding 2022-003 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: A general lack of oversight of the position that is responsible for duties that are significantly related to maintaining compliance with HUD requirements exists. This is indicative of missing control(s). Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Criteria: Lokahi Pacific and Affiliates must implement internal controls that provide for timely prevention, detection and correction over compliance. Context and Cause of Condition: There is currently no process implemented to monitor the performance of significant processes being performed by staff. Potential Effect: Continued noncompliance with HUD requirements and the potential that future HUD support could be discontinued. Questioned Costs: None Recommendation: Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-002
Finding 2022-002 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: Annual eligibility and income recertification were not consistently documented and/or not completed timely. Criteria: Annual reexamination of incomes of households occupying assisted units must be completed. Context and Cause of Condition: A sample of tenant files were selected to verify that annual reexamination of incomes were completed. Documentation to support the process was completed was noted to be missing for some files. There is currently no process implemented to monitor the compliance requirement functions being performed by responsible staff. Potential Effect: Future tenant assistance payments may be disallowed. Questioned Costs: None Recommendation: Management should implement a process that provides for monitoring of all functions performed by responsible staff, especially as it relates to compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-003
Finding 2022-003 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: A general lack of oversight of the position that is responsible for duties that are significantly related to maintaining compliance with HUD requirements exists. This is indicative of missing control(s). Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Criteria: Lokahi Pacific and Affiliates must implement internal controls that provide for timely prevention, detection and correction over compliance. Context and Cause of Condition: There is currently no process implemented to monitor the performance of significant processes being performed by staff. Potential Effect: Continued noncompliance with HUD requirements and the potential that future HUD support could be discontinued. Questioned Costs: None Recommendation: Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-002
Finding 2022-002 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: Annual eligibility and income recertification were not consistently documented and/or not completed timely. Criteria: Annual reexamination of incomes of households occupying assisted units must be completed. Context and Cause of Condition: A sample of tenant files were selected to verify that annual reexamination of incomes were completed. Documentation to support the process was completed was noted to be missing for some files. There is currently no process implemented to monitor the compliance requirement functions being performed by responsible staff. Potential Effect: Future tenant assistance payments may be disallowed. Questioned Costs: None Recommendation: Management should implement a process that provides for monitoring of all functions performed by responsible staff, especially as it relates to compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.
Finding 2022-003
Finding 2022-003 - Supportive Housing for Person with Disabilities – Assistance Listing Number 14.181 Condition: A general lack of oversight of the position that is responsible for duties that are significantly related to maintaining compliance with HUD requirements exists. This is indicative of missing control(s). Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Criteria: Lokahi Pacific and Affiliates must implement internal controls that provide for timely prevention, detection and correction over compliance. Context and Cause of Condition: There is currently no process implemented to monitor the performance of significant processes being performed by staff. Potential Effect: Continued noncompliance with HUD requirements and the potential that future HUD support could be discontinued. Questioned Costs: None Recommendation: Additional controls should be implemented that would allow for Management to be alerted more timely to non-performance of job duties, especially as it relates to HUD compliance requirements. Views of Responsible Officials: From early 2020 through early 2022, conditions brought about as a direct result of the COVID-19 pandemic severely disrupted normal operations. Attendance and performance of key personnel was impacted and resulted in a failure to complete normal processes and procedures to ensure compliance. See Planned Corrective Action Plan.