FAC Explorer

Audit 412437

FY End
2025-12-31
Total Expended
$1.49M
Findings
2
Programs
2
Organization: Northwest Estates 811 (WA)
Year: 2025 Accepted: 2026-09-28
Auditor: SQUIRES MADDUX & COMPANY PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1237487 2025-001 Material Weakness Yes N
1237488 2025-001 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.181 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES $844,399 Yes 1
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $579,923 Yes 0

Contacts

Name Title Type
YRK8D71ECC13 Jennifer Roybal Auditee
5094846733 John Maddux Auditor
No contacts on file

Notes to SEFA

The above schedule of expenditures of federal awards includes the federal grant activity of Northwest Estates 811, HUD Project No. 171-HD013 and 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); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Northwest Estates 811, it is not intended to and does not present the financial position, change in net assets, or cash flows of Northwest Estates 811.
Expenditures reported on the Schedule 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. Northwest Estates 811 has elected not to use the de Minimis indirect cost rate allowed under the Uniform Guidance.
Northwest Estates 811 has received a U.S. Department of Housing and Urban Development capital advance pursuant to Section 811, of the National Housing Act, and a loan pursuant to the HOME Investment Partnerships Program. The capital advance and HOME loan outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Northwest Estates 811 received no additional capital advance or loan proceeds during the year. The balance of the capital advance and loan outstanding at December 31, 2025 consisted of: ALS 14.181 $844,399; ALS 14.239 $579,923.

Finding Details

Finding 2025-001
II. FINDINGS – FINANCIAL STATEMENTS AUDIT See Finding 2025-001 under Part III Findings – Major Federal Award Program Audit III. FINDINGS – MAJOR FEDERAL AWARD PROGRAM AUDIT S3800-010: Finding Reference Number: 2025-001 (Repeat Finding) S3800-011: ALS 14.181 Supportive Housing for Persons With Disabilities S3800-15: Type of Finding: Financial Statement Findings and Federal Award Finding S3800-16: Finding Resolution Status: Unresolved S3800-17: Information on Universe of Population Size: N/A – Sampling was not used in connection with this finding S3800-18: Sample Size Information: N/A – Sampling was not used in connection with this finding S3800-19: Identification of Repeat Finding and Finding Reference Number: 2024-001 S3800-20: Criteria: 24 CFR § 891.405(a) requires the Owner to establish and maintain a replacement reserve to aid in funding extraordinary maintenance and the repair and replacement of capital items. Section 891.405(d) further provides that replacement-reserve funds may be drawn and used only in accordance with HUD guidelines and with the approval of, or as directed by, HUD. The regulation also permits use of the reserve, with HUD approval, for certain approved capital purposes. In addition, 24 CFR § 891.400(e), applicable to projects operating under a PRAC, requires project funds to be used for operation of the project, including required insurance coverage, and for required deposits to the replacement reserve, in accordance with the HUD-approved budget. S3800-030: Statement of Condition: During fiscal year 2024, the management company made a withdrawal of $12,027 to pay the annual insurance premium from the replacement reserve account without prior HUD approval. The withdrawal was not refunded to the replacement reserve account during the current year. During fiscal year 2025, the management company made an additional withdrawal totaling $7,777 to pay the insurance premium from the replacement reserve account without prior HUD approval. S3800-032: Cause: Management has designed controls to ensure that all replacement reserve withdrawals are approved before disbursement, but the control was not always operating as intended. III. FINDINGS – MAJOR FEDERAL AWARD PROGRAM AUDIT (Continued) S3800-010: Finding Reference Number: 2025-001 (Repeat Finding) (Continued) S3800-011: ALS 14.181 Supportive Housing for Persons With Disabilities S3800-033: Effect: The Corporation is not in compliance with HUD requirements with respect to withdrawals from the replacement reserve account. S3800-035: Auditor Non-Compliance Code: A – Unauthorized withdrawals from the replacement reserve account S3800-040: Questioned Costs: $19,804 S3800-037: FHA/Contract Number: 171-HD013 S3800-038: Questioned Costs: $19,804 S3800-045: Reporting Views of Responsible Officials: Management agrees with the finding and the auditor’s recommendation, and will take the necessary steps to mitigate further non-compliance. Management will seek approval from HUD for these withdrawals and any future withdrawals from the replacement reserve account. S3800-050: Context: The Corporation is experiencing liquidity concerns and had insufficient cash flow to pay the insurance premiums. Insurance premiums are an allowable Project expense, but management should have sought HUD approval to pay the insurance premiums from the replacement reserve. S3800-080: Recommendation: Management should ensure that all staff are aware of the HUD requirements regarding withdrawals from the replacement reserve account and establish the necessary procedures to ensure all withdrawals are approved prior to payment. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: Management agrees with the finding and the auditor’s recommendation, and will take the necessary steps to mitigate further non-compliance. Management will seek approval from HUD for these withdrawals and any future withdrawals from the replacement reserve account. S3800-130: Response Indicator: Agree S3800-140: Completion Date: 08/31/2026 S3800-150: Response: Management agrees with the finding and the auditor’s recommendation, and will take the necessary steps to mitigate further non-compliance.