Audit 406339

FY End
2025-12-31
Total Expended
$4.71M
Findings
1
Programs
4
Year: 2025 Accepted: 2026-07-02

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
1222756 2025-001 Material Weakness Yes N

Contacts

Name Title Type
PFXGB5BU5TV5 Craig Wikoff Auditee
6202757521 Cynthia R Gorges Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards includes the federal award activity of the Organization and is presented on the accrual basis of accounting. 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 the Organization, it is not intended and does not present the financial position, changes in net assets, or cash flows of the Organization.
Expenditures 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. The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
The Organization has received two direct capital advances under Section 811 and one mortgage under Section 223(a)(7) of the National Housing Act. The loan balances outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. The Organization received no additional loans during the year. The following represents the balance of the loans outstanding at December 31, 2025: Program Title - Project Name Assistance Listing Number Agency Identifying Number Outstanding Balance at December 31, 2025 Section 811 Capital Advance Boardwalk Estates, Inc. 14.181 FHA 102-HD011 $ 497,600 Liberty Place, Inc. 14.181 FHA 102-HD012 612,900 Section 223 Mortgage Insurance SDSI Housing Corporation, Inc. 14.155 FHA 102-11089 2,589,651 $ 3,700,151

Finding Details

Federal Program - Assistance Listing Number 14.155 - Section 223 Mortgage Insurance Population, sample size, and instances of non-compliance The population consists of two reserve for replacements reimbursement requests made by SDSI Housing Corporation, Inc. (SDSI Housing). Both of the reimbursement requests were tested, and one instance of non-compliance was noted. Condition SDSI Housing received reimbursement from the reserve for replacements of $135,824 for roof repairs that were previously funded with insurance proceeds. Criteria Under HUD Occupancy Handbook 4350.3 REV-1, the reserve for replacements is generally used to help defray the costs of replacing a project's capital items. Effect SDSI Housing’s reserve for replacements is under funded by $135,824 due to the reimbursement of ineligible items. Cause A reimbursement request was submitted for SDSI Housing’s major roof repairs which are traditionally contemplated as eligible for draws under HUD Occupancy Handbook 4350.3 REV-1. However, management did not consider the fact that such repairs had already been funded by insurance proceeds, so the major roof repairs resulted in no cost to SDSI Housing. Recommendation Management should return $135,824 to SDSI Housing’s reserve for replacements for the ineligible withdrawal. Reporting views of management Management agrees with the finding. Management returned ineligible funds of $135,824 to SDSI Housing’s reserve for replacements on April 16, 2026. Auditor Non-Compliance Classification Special Tests and Provisions - Unauthorized withdrawals from replacement reserve account