FAC Explorer

Audit 44087

FY End
2022-06-30
Total Expended
$5.59M
Findings
4
Programs
4
Organization: Edward M. Marx Apartments, Inc. (FL)
Year: 2022 Accepted: 2023-03-01
Auditor: Bellows Associates P A

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42029 2022-001 - Yes N
42030 2022-002 - - E
618471 2022-001 - Yes N
618472 2022-002 - - E

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly - Capital Advance $4.70M Yes 2
14.239 Home Investment Partnerships Program $397,105 - 0
14.157 Supportive Housing for the Elderly- Project Rental Assistance Contracts $282,252 Yes 0
14.218 Community Development Block Grants/entitlement Grants $215,395 - 0

Contacts

Name Title Type
KB7BZ5E3LYT1 Irene Phillips Auditee
9548359200 Jennifer R. Koffman Auditor
No contacts on file

Notes to SEFA

Title: NOTE C - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CAPITAL ADVANCE Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal award activity of EdwardM. Marx Apartments, Inc., HUD Project No.071-EE244, 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 ofFederal 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 Edward M. Marx Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Edward M. Marx Apartments, Inc. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 De Minimis Rate Used: N Rate Explanation: Edward M. Marx Apartments, Inc., has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Edward M. Marx Apartments, Inc., has received a HUD capital advance under Section 202 of the National Housing Act. The capital advance balance outstanding at the beginning of the year is included in the federal expenditures presented in the schedule. Edward M. Marx Apartments, Inc., received no additional loans during the year.The balance of the capital advance outstanding at June 30, 2022 was $4,698,900.

Finding Details

Finding 2022-001
FINDING No. 2022-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Total assistance revenue. Sample Size Information: All monthly PRAC requests. Identification of Repeat Finding and Finding Reference Number: Yes, 2021-001. Criteria: As required by HUD regulations, applications for renewal of the PRAC contracts must be completed within 120 days of the contract expiration date. Statement of Condition: The Project did not complete the renewal process within 120 days of the contract expiration date. Cause: The Project did not follow HUD regulations for contract renewal resulting in the delay of HUD funding and short term loans taken from the Replacement Reserve. Effect or Potential Effect: The Project is not in compliance with HUD regulations for an untimely renewal of the PRAC contract. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should comply with HUD regulations for the timely renewal of the PRAC contract. Response Indicator: Agree. Completion Date: 4/4/2022 Response: Compliance Department has implemented a system to monitor and track HUD contract renewals to ensure the process will be completed in a timely manner going forward.
Finding 2022-002
FINDING No. 2022-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Thirty-three tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires timely verification of tenant?s income through the use of Enterprise Verification (EIV) reports with the corresponding documentation maintained and that criminal background checks be performed prior to tenant acceptance. Statement of Condition: Of the tenant files selected, one tenant file did not have an EIV for recertification documentation maintained and one tenant moved in prior to completing the tenant screening process. Cause: The Project did not perform and/or maintain the recertification EIV and did not perform tenant screening in a timely manner. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: Management should implement procedures to ensure that the Project verifies tenant income through the EIV system in a timely manner and maintain all required documentation and perform background checks prior to tenant acceptance. Response Indicator: Agree. Completion Date: 3/31/2022 Response: Training classes are planned and will be conducted on running EIV reports and performing tenant background checks. In addition, tenant files will be selected for review, at random, to ensure these items are completed in a timely manner.
Finding 2022-001
FINDING No. 2022-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Total assistance revenue. Sample Size Information: All monthly PRAC requests. Identification of Repeat Finding and Finding Reference Number: Yes, 2021-001. Criteria: As required by HUD regulations, applications for renewal of the PRAC contracts must be completed within 120 days of the contract expiration date. Statement of Condition: The Project did not complete the renewal process within 120 days of the contract expiration date. Cause: The Project did not follow HUD regulations for contract renewal resulting in the delay of HUD funding and short term loans taken from the Replacement Reserve. Effect or Potential Effect: The Project is not in compliance with HUD regulations for an untimely renewal of the PRAC contract. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should comply with HUD regulations for the timely renewal of the PRAC contract. Response Indicator: Agree. Completion Date: 4/4/2022 Response: Compliance Department has implemented a system to monitor and track HUD contract renewals to ensure the process will be completed in a timely manner going forward.
Finding 2022-002
FINDING No. 2022-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Thirty-three tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires timely verification of tenant?s income through the use of Enterprise Verification (EIV) reports with the corresponding documentation maintained and that criminal background checks be performed prior to tenant acceptance. Statement of Condition: Of the tenant files selected, one tenant file did not have an EIV for recertification documentation maintained and one tenant moved in prior to completing the tenant screening process. Cause: The Project did not perform and/or maintain the recertification EIV and did not perform tenant screening in a timely manner. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: Management should implement procedures to ensure that the Project verifies tenant income through the EIV system in a timely manner and maintain all required documentation and perform background checks prior to tenant acceptance. Response Indicator: Agree. Completion Date: 3/31/2022 Response: Training classes are planned and will be conducted on running EIV reports and performing tenant background checks. In addition, tenant files will be selected for review, at random, to ensure these items are completed in a timely manner.