FAC Explorer

Audit 39877

FY End
2022-12-31
Total Expended
$1.23M
Findings
4
Programs
2
Organization: Penn Manor Apartments (div. of Southeast Kansas Lutherans, Inc.) (KS)
Year: 2022 Accepted: 2023-09-07
Auditor: Pettit & Company LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
44177 2022-001 - Yes A
44178 2022-002 - - C
620619 2022-001 - Yes A
620620 2022-002 - - C

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $987,866 Yes 2
14.195 Section 8 Housing Assistance Payments Program $12,042 - 0

Contacts

Name Title Type
TFZNCQYTMFM7 Christy Dumham Auditee
6203311040 John Pettit Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: NOTE 1 BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards includes the federal award activity of Penn Manor Apartments 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 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 54th Street Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Penn Manor Apartments.NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on 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 reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS (14.155) - Balances outstanding at the end of the audit period were 940832.

Finding Details

Finding 2022-001
Finding 2022-001 Allowable Costs Statement of condition: The Organization repaid $7,200 on a related party loan without surplus cash or HUD approval. Criteria: Activities allowed or un-allowed of the Uniform Guidance requires the Organization only spends funds on items that are necessary and reasonable for the Project?s operations. Effect or potential effect: The Organization is not in compliance with Uniform Guidance. Cause: The board of directors requested the Organization make payments on the related party loan. Recommendation: The Organization should seek reimbursement of the $7,200 paid during 2022 and the $6,000 paid during 2021 on the related party loan, or seek approval from the Department of Housing and Urban Development. Reporting views of responsible officials: Our organization is a non-profit entity. Our funds were depleted during the covid pandemic to the point our only available asset was the loan we made to Penn Manor several years ago. So we requested the loan be repaid at an amount the Manor could afford. We apologize for any wrong doing and ask for forgiveness or the error and permission to continue with the repayment so we can continue to operate. Again we do apologize and ask forgiveness.
Finding 2022-002
Finding 2022-002 Cash Management Statement of condition: The Project is not current on its mortgage at December 31, 2022. Criteria: Cash Management of the Uniform Guidance requires the Organization only spends funds on items that are necessary and reasonable for the Project?s operations. Effect or potential effect: The Organization is not in compliance with Uniform Guidance. Cause: The Project made payments on a related party loan when the monies used should have been used to pay the mortgage. Recommendation: The Organization should seek reimbursement of the $7,200 paid during 2022 and the $6,000 paid during 2021 on the related party loan, in order to improve its cash position. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2022 Section III Federal Award Findings (Continued) Finding 2022-002 Cash Management (Continued) Reporting views of responsible officials: Our organization is a non-profit entity. Our funds were depleted during the covid pandemic to the point our only available asset was the loan we made to Penn Manor several years ago. So we requested the loan be repaid at an amount the Manor could afford. We apologize for any wrong doing and ask for forgiveness or the error and permission to continue with the repayment so we can continue to operate. Again we do apologize and ask forgiveness.
Finding 2022-001
Finding 2022-001 Allowable Costs Statement of condition: The Organization repaid $7,200 on a related party loan without surplus cash or HUD approval. Criteria: Activities allowed or un-allowed of the Uniform Guidance requires the Organization only spends funds on items that are necessary and reasonable for the Project?s operations. Effect or potential effect: The Organization is not in compliance with Uniform Guidance. Cause: The board of directors requested the Organization make payments on the related party loan. Recommendation: The Organization should seek reimbursement of the $7,200 paid during 2022 and the $6,000 paid during 2021 on the related party loan, or seek approval from the Department of Housing and Urban Development. Reporting views of responsible officials: Our organization is a non-profit entity. Our funds were depleted during the covid pandemic to the point our only available asset was the loan we made to Penn Manor several years ago. So we requested the loan be repaid at an amount the Manor could afford. We apologize for any wrong doing and ask for forgiveness or the error and permission to continue with the repayment so we can continue to operate. Again we do apologize and ask forgiveness.
Finding 2022-002
Finding 2022-002 Cash Management Statement of condition: The Project is not current on its mortgage at December 31, 2022. Criteria: Cash Management of the Uniform Guidance requires the Organization only spends funds on items that are necessary and reasonable for the Project?s operations. Effect or potential effect: The Organization is not in compliance with Uniform Guidance. Cause: The Project made payments on a related party loan when the monies used should have been used to pay the mortgage. Recommendation: The Organization should seek reimbursement of the $7,200 paid during 2022 and the $6,000 paid during 2021 on the related party loan, in order to improve its cash position. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2022 Section III Federal Award Findings (Continued) Finding 2022-002 Cash Management (Continued) Reporting views of responsible officials: Our organization is a non-profit entity. Our funds were depleted during the covid pandemic to the point our only available asset was the loan we made to Penn Manor several years ago. So we requested the loan be repaid at an amount the Manor could afford. We apologize for any wrong doing and ask for forgiveness or the error and permission to continue with the repayment so we can continue to operate. Again we do apologize and ask forgiveness.