FAC Explorer

Audit 4423

FY End
2022-12-31
Total Expended
$9.46M
Findings
12
Programs
1
Organization: Herbert Brooks Housing Development Fund Company, INC (NY)
Year: 2022 Accepted: 2023-11-28
Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
2615 2022-001 Significant Deficiency Yes L
2616 2022-002 Significant Deficiency Yes N
2617 2022-003 Significant Deficiency - N
2618 2022-001 Significant Deficiency Yes L
2619 2022-002 Significant Deficiency Yes N
2620 2022-003 Significant Deficiency - N
579057 2022-001 Significant Deficiency Yes L
579058 2022-002 Significant Deficiency Yes N
579059 2022-003 Significant Deficiency - N
579060 2022-001 Significant Deficiency Yes L
579061 2022-002 Significant Deficiency Yes N
579062 2022-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $1.62M Yes 3

Contacts

Name Title Type
SBB8GNEVUC89 Derrick Lovett Auditee
3472262481 Frank Buss II Auditor
No contacts on file

Notes to SEFA

Title: Note 3 - U.S. Department of Housing and Urban Development loan program Accounting Policies: Note 1 - Basis of presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Herbert Brooks Housing Development Fund Company, Inc., HUD Project No. 012-EH-699 NY 36-S891-009, under programs of the federal government for the year ended December 31, 2022. The information in the Schedule is presented in accordance with the requirements of Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. Note 2 - Summary of significant accounting policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards; wherein certain types of expenditures are not allowed. Assistance Listing numbers (“AL No.”) are provided when available. De Minimis Rate Used: N Rate Explanation: Herbert Brooks Housing Development Fund Company, Inc. has elected not to use the 10% de minimis indirect cost rate. Herbert Brooks Housing Development Fund Company, Inc. has received a U.S. Department of Housing and Urban Development direct loan under Section 202 of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Herbert Brooks Housing Development Fund Company, Inc. received no additional loans during the year. The balance of the loan outstanding at December 31, 2022 consists of: AL Number: 14.157, Program Name: Section 202 direct loan, Outstanding balance at December 31, 2022: $7,838,700

Finding Details

Finding 2022-001
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-1 Statement of Condition The electronic submission of the financial statements is overdue. Criteria The financial statements must be electronically submitted to HUD through FASSUB within 90 days of fiscal year-end. Questioned Costs None Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls are not in place to ensure that the Company reports financial data on time. Recommendation We recommend that the electronic submission be completed as soon as possible. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: K – Electronic submission verification
Finding 2022-002
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-2 Statement of Condition A security deposits cash account was not established in accordance with HUD regulations in that funds were not segregated from the operating account. Criteria The tenant security deposits cash account must be kept in a separate, interest-bearing account in the name of the Company, per HUD Handbook 4370.2 REV-1. Questioned Costs $17,297 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure tenant security deposits are maintained in accordance with HUD regulations. Recommendation Management should set up a separate bank account in the Company's name for tenant security deposits. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for creating a separate bank account in the Company's name for tenant security deposits. Auditor Noncompliance Code: M – Security Deposits
Finding 2022-003
Finding No. 2022-3 Statement of Condition Owners were unable to maintain the physical condition of the property. Criteria Owners are obligated to maintain the physical condition of the property as stated in the regulatory agreement. Questioned Costs $0 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure that the owners maintain the physical condition of the property. Recommendation Management should support the continuing physical maintenance of the property. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for ensuring that the physical condition of the property is maintained. Auditor Noncompliance Code: I – Failure to Maintain Property
Finding 2022-001
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-1 Statement of Condition The electronic submission of the financial statements is overdue. Criteria The financial statements must be electronically submitted to HUD through FASSUB within 90 days of fiscal year-end. Questioned Costs None Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls are not in place to ensure that the Company reports financial data on time. Recommendation We recommend that the electronic submission be completed as soon as possible. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: K – Electronic submission verification
Finding 2022-002
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-2 Statement of Condition A security deposits cash account was not established in accordance with HUD regulations in that funds were not segregated from the operating account. Criteria The tenant security deposits cash account must be kept in a separate, interest-bearing account in the name of the Company, per HUD Handbook 4370.2 REV-1. Questioned Costs $17,297 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure tenant security deposits are maintained in accordance with HUD regulations. Recommendation Management should set up a separate bank account in the Company's name for tenant security deposits. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for creating a separate bank account in the Company's name for tenant security deposits. Auditor Noncompliance Code: M – Security Deposits
Finding 2022-003
Finding No. 2022-3 Statement of Condition Owners were unable to maintain the physical condition of the property. Criteria Owners are obligated to maintain the physical condition of the property as stated in the regulatory agreement. Questioned Costs $0 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure that the owners maintain the physical condition of the property. Recommendation Management should support the continuing physical maintenance of the property. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for ensuring that the physical condition of the property is maintained. Auditor Noncompliance Code: I – Failure to Maintain Property
Finding 2022-001
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-1 Statement of Condition The electronic submission of the financial statements is overdue. Criteria The financial statements must be electronically submitted to HUD through FASSUB within 90 days of fiscal year-end. Questioned Costs None Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls are not in place to ensure that the Company reports financial data on time. Recommendation We recommend that the electronic submission be completed as soon as possible. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: K – Electronic submission verification
Finding 2022-002
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-2 Statement of Condition A security deposits cash account was not established in accordance with HUD regulations in that funds were not segregated from the operating account. Criteria The tenant security deposits cash account must be kept in a separate, interest-bearing account in the name of the Company, per HUD Handbook 4370.2 REV-1. Questioned Costs $17,297 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure tenant security deposits are maintained in accordance with HUD regulations. Recommendation Management should set up a separate bank account in the Company's name for tenant security deposits. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for creating a separate bank account in the Company's name for tenant security deposits. Auditor Noncompliance Code: M – Security Deposits
Finding 2022-003
Finding No. 2022-3 Statement of Condition Owners were unable to maintain the physical condition of the property. Criteria Owners are obligated to maintain the physical condition of the property as stated in the regulatory agreement. Questioned Costs $0 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure that the owners maintain the physical condition of the property. Recommendation Management should support the continuing physical maintenance of the property. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for ensuring that the physical condition of the property is maintained. Auditor Noncompliance Code: I – Failure to Maintain Property
Finding 2022-001
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-1 Statement of Condition The electronic submission of the financial statements is overdue. Criteria The financial statements must be electronically submitted to HUD through FASSUB within 90 days of fiscal year-end. Questioned Costs None Effect or potential effect The Company is in non-compliance with specific requirements of a major federal program. Cause Controls are not in place to ensure that the Company reports financial data on time. Recommendation We recommend that the electronic submission be completed as soon as possible. Reporting views of responsible officials Auditee agrees with the auditor. Auditor Noncompliance Code: K – Electronic submission verification
Finding 2022-002
Section III - Findings and Questioned Costs-Major Federal Award Program Audit Finding No. 2022-2 Statement of Condition A security deposits cash account was not established in accordance with HUD regulations in that funds were not segregated from the operating account. Criteria The tenant security deposits cash account must be kept in a separate, interest-bearing account in the name of the Company, per HUD Handbook 4370.2 REV-1. Questioned Costs $17,297 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure tenant security deposits are maintained in accordance with HUD regulations. Recommendation Management should set up a separate bank account in the Company's name for tenant security deposits. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for creating a separate bank account in the Company's name for tenant security deposits. Auditor Noncompliance Code: M – Security Deposits
Finding 2022-003
Finding No. 2022-3 Statement of Condition Owners were unable to maintain the physical condition of the property. Criteria Owners are obligated to maintain the physical condition of the property as stated in the regulatory agreement. Questioned Costs $0 Effect or potential effect The Company is noncompliant with specific requirements of its major federal program. Cause Controls are not in place to ensure that the owners maintain the physical condition of the property. Recommendation Management should support the continuing physical maintenance of the property. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for ensuring that the physical condition of the property is maintained. Auditor Noncompliance Code: I – Failure to Maintain Property