Audit 397551

FY End

2025-12-31

Total Expended

$1.59M

Findings

3

Programs

1

Organization: Independence Communities INC (TX)

Year: 2025 Accepted: 2026-04-02

Auditor: PITTSFORD SAMUELS PLLC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
1205804	2025-001	Material Weakness	Yes	N
1205805	2025-002	Material Weakness	Yes	J
1205806	2025-003	Material Weakness	Yes	P

ALN	Program	Spent	Major	Findings
14.181	SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES	$186,421	Yes	0

Contacts

Name	Title	Type
CJ9VFA7396S3	Darius Tuminas	Auditee
9365216110	Nancy Mack	Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards includes the federal grant activity of Independence Village Apartments, HUD Project No. 114-HD024 and is presented on the accrual basis of accounting. 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. Because the schedule presents only a selected portion of the operations of Independence Village Apartments, it is not intended to and does not present the financial position, changes in net assets or cash flows of Independence Village Apartments.

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 reimbursements.

The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

The Project received a loan under HUD's Section 811 Capital Advance Program in 2005. The loan balance at the beginning of the year, amounting to $1,403,439, is included in the schedule of expenditures of federal awards The Project has received no additional funds during the year. The loan balance is reported as net assets with donor restrictions in the statement of financial position.

Finding Details

Finding 2025-001

Findings reference number: 2025-001 -Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities, AL 14.181 -Type of finding: Compliance -Resolution Status: Completed. -Population size: N/A - Sample size: N/A - Repeat finding: Yes - Criteria: Monthly deposits to the replacement reserve must be made in a timely manner. - Condition: The monthly deposit for repayment of loan from the replacement reserve was not done for December 2025. - Cause: Management inadvertently transferred the amount to the replacement reserve account of another project managed by the management company. - Effect: The repayment of the loan is not on schedule. - Noncompliance code: N. - Questioned costs: $769. --Reporting views of officials: Auditee agrees with the finding. -Contract Number: 114HD024 - Context: This was noted while performing audit procedures on the replacement reserve. - Recommendation: Management should ensure that all deposits required to be made to the replacement reserve be made on a timely basis to the correct entity. - Auditee's comments: Auditee agrees with the finding, but asserts that it was due to an inadvertent error. The correcting deposit has been made on February 11, 2026. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: February 11, 2026 - Response: Management plans to make all repayments of the loan from the replacement reserve in a timely manner.

Finding 2025-002

Findings reference number: 2025-002 - Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities, AL 14.181 - Type of finding: Compliance - Resolution Status: In process -population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Per the HUD management fee schedule for owners and agents, the basic rate for management fees is $50 per unit per month (pupm). The Project qualifies for add-on fees of $10 pupm for having 1 to 15 units in property and $3 pupm for being a Sec 811 property with the total cap of management fees at $63 pupm. - Condition: Management fees for the year ended December 31, 2025 were paid in excess of the monthly pupm cap. - Cause: Management oversight. - Effect: Management miscalculated the management fees for the year ended December 31, 2025, and hence, fees were paid in excess of the cap by $2,629. A receivable was Recorded for the overpaid management fees. - Noncompliance code: J. Unauthorized management fees - Questioned costs: $2,629. - Reporting views of officials: Auditee agrees with the finding, - Context: This was noted while performing audit procedures on management fees during the audit. -Recommendation: Management should ensure that management fees are paid in accordance with HUD limits. - Auditee's comments: Auditee agrees with the finding and will repay the overcharged fees. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/26. - Response: Management plans to repay the overcharged fees as soon as possible.

Finding 2025-003

Findings reference number: 2025-003 - Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities, AL 14.181 - Type of finding: Compliance - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: No - Criteria: Under the Section 811 Project Rental Assistance program, the Project is responsible for establishing, maintaining, and protecting detailed, up-to-date tenant files in compliance with HUD Handbook 4350.3. - Condition: During the year ended December 31, 2025 four tenant move-out files of former tenants could not be located by the staff and management at the Project site. - Cause: Change in community director at site. - Effect: The Project is not in compliance with the compliance requirements of the program. - Noncompliance code: Z. Other - Questioned costs: None. - Reporting views of officials: Auditee agrees with the finding, - Context: This was noted while performing audit procedures on tenant eligibility during the audit. - Recommendation: Management should ensure that all tenant files are maintained in a safe and secure manner in accordance with HUD rules. - Auditee's comments: Auditee agrees with the finding, but asserts that this was a one-time incident where the previous community director, at the time of leaving, may have inadvertently destroyed or misplaced the files for tenants who had moved out. - Auditors' summary of auditee's comments: They are in agreement. Completion date: 12/31/26. - Response: Management will make sure to maintain all tenant files in a safe and secure manner.