Audit 47521

FY End
2022-03-31
Total Expended
$5.79M
Findings
2
Programs
1
Organization: Frances House, INC (IL)
Year: 2022 Accepted: 2022-10-12
Auditor: Rsm US LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
43866 2022-006 Significant Deficiency - A
620308 2022-006 Significant Deficiency - A

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $5.79M Yes 1

Contacts

Name Title Type
DA6QF5AL2R86 Ronald J. Wilson Auditee
3093431550 Thomas Farrell Auditor
No contacts on file

Notes to SEFA

Title: Note 3. Subrecipients Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Frances House, Inc. (FHI), and its subsidiaries, Pinnacle Opportunities, Inc. (PIN), Pioneer Concepts, Inc. (PIO), and Residential Alternatives of Illinois, Inc. (RAI) (collectively the Organization) under programs of the federal government for the year ended March 31, 2022. Accounting principles in the United States of America require the financial statements of Frances House, Inc., Pinnacle Opportunities, Inc., Pioneer Concepts, Inc., and Residential Alternatives of Illinois, Inc. to be consolidated for financial reporting purposes. 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 the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. 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: The auditee did not use the de minimis cost rate. None of the Organizations federal awards expenditures were provided to subrecipients during the year ended March 31, 2022.
Title: Note 4. Noncash Assistance, Insurance, and Loan Gurantees Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Frances House, Inc. (FHI), and its subsidiaries, Pinnacle Opportunities, Inc. (PIN), Pioneer Concepts, Inc. (PIO), and Residential Alternatives of Illinois, Inc. (RAI) (collectively the Organization) under programs of the federal government for the year ended March 31, 2022. Accounting principles in the United States of America require the financial statements of Frances House, Inc., Pinnacle Opportunities, Inc., Pioneer Concepts, Inc., and Residential Alternatives of Illinois, Inc. to be consolidated for financial reporting purposes. 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 the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. 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: The auditee did not use the de minimis cost rate. The Organization did not receive any noncash awards for surplus property, interest rate subsidies, insurance awards or other noncash awards during the fiscal year ended March 31, 2022.
Title: Note 5. Indirect Cost Rate Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Frances House, Inc. (FHI), and its subsidiaries, Pinnacle Opportunities, Inc. (PIN), Pioneer Concepts, Inc. (PIO), and Residential Alternatives of Illinois, Inc. (RAI) (collectively the Organization) under programs of the federal government for the year ended March 31, 2022. Accounting principles in the United States of America require the financial statements of Frances House, Inc., Pinnacle Opportunities, Inc., Pioneer Concepts, Inc., and Residential Alternatives of Illinois, Inc. to be consolidated for financial reporting purposes. 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 the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. 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: The auditee did not use the de minimis cost rate. The Organization has not yet elected to use the 10% de minimis indirect cost rate as allowed under Uniform Guidance.
Title: Note 6. Provider Relief Fund Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Frances House, Inc. (FHI), and its subsidiaries, Pinnacle Opportunities, Inc. (PIN), Pioneer Concepts, Inc. (PIO), and Residential Alternatives of Illinois, Inc. (RAI) (collectively the Organization) under programs of the federal government for the year ended March 31, 2022. Accounting principles in the United States of America require the financial statements of Frances House, Inc., Pinnacle Opportunities, Inc., Pioneer Concepts, Inc., and Residential Alternatives of Illinois, Inc. to be consolidated for financial reporting purposes. 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 the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. 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: The auditee did not use the de minimis cost rate. For the federal awards related to the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution (ALN 93.498) program, the U.S. Department of Health (HHS) has indicated the amounts on the schedule be reported corresponding to reporting requirements of the HRSA Provider Relief Fund Reporting Portal. Payments from HHS for PRF are assigned to Payment Received Periods (each, a Period) based upon the date each payment from the PRF was received. Entities report into the HRSA PRF Reporting Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability). The accompanying schedule of expenditures of federal awards includes $3,746,040 of Period 1 distributions received from HHS between April 10, 2020, through June 30, 2020 and reported by the Organization in the HRSA PRF Reporting Portal as used during the corresponding Period of Availability in accordance with guidance from HHS. The Schedule also includes $2,048,005 of Period 2 distributions received from HHS between July 1, 2020, through December 31, 2020 and reported by the Organization in the HRSA PRF Reporting Portal as used during the corresponding Period of Availability in accordance with guidance from HHS. These amounts were recognized as other operating revenue in the Organizations financial statements for the year ended March 31, 2021. Due to the PRF reporting requirements, these amounts are not the total PRF received and recognized as other operating revenue in the Organizations financial statements. PRF distributions recognized as other operating revenue in the Organizations statements of operations and changes in net assets were $1,309,243 and $5,984,274 during the years ended March 31, 2022 and 2021, respectively.

Finding Details

Identifying Number: 2022-006 Information on the Federal Program: Federal Assistance Listing #93.498, Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution. Criteria or Specific Requirement: Under Uniform Guidance, effective control and accountability must be maintained for expenses used to prevent, prepare for, and respond to COVID-19. Grantee must adequately safeguard all such property and must provide assurance that it is used solely for authorized purposes. Grantee must also have systems in place that provide reasonable assurance that the information is accurate, allowable and compliant with the terms and conditions of the agreement. 2 CFR 200.303. Condition: The Organization does not have adequate controls to provide reasonable assurance that expenditures reported as qualifying grant expenditures are allowable and compliant with the terms and conditions of the agreements. Cause: Grant agreements are reviewed for allowable and unallowable costs and for period of availability. Chief Financial Officer reviews and approves the expenditure schedules before reports are submitted. However, the review process is not consistently documented, and therefore, controls are not operating effectively. Questioned Costs: None. Context: There was no documented review on any of the expenditure submissions, therefore, this is a systemic problem. All submissions were reviewed and therefore, population was statistically valid. Repeat Finding: No. Recommendation: A formal process should be implemented and placed in service to ensure the review process of the reported grant expenditures is documented. Views of Responsible Officials: See Corrective Action Plan.
Identifying Number: 2022-006 Information on the Federal Program: Federal Assistance Listing #93.498, Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution. Criteria or Specific Requirement: Under Uniform Guidance, effective control and accountability must be maintained for expenses used to prevent, prepare for, and respond to COVID-19. Grantee must adequately safeguard all such property and must provide assurance that it is used solely for authorized purposes. Grantee must also have systems in place that provide reasonable assurance that the information is accurate, allowable and compliant with the terms and conditions of the agreement. 2 CFR 200.303. Condition: The Organization does not have adequate controls to provide reasonable assurance that expenditures reported as qualifying grant expenditures are allowable and compliant with the terms and conditions of the agreements. Cause: Grant agreements are reviewed for allowable and unallowable costs and for period of availability. Chief Financial Officer reviews and approves the expenditure schedules before reports are submitted. However, the review process is not consistently documented, and therefore, controls are not operating effectively. Questioned Costs: None. Context: There was no documented review on any of the expenditure submissions, therefore, this is a systemic problem. All submissions were reviewed and therefore, population was statistically valid. Repeat Finding: No. Recommendation: A formal process should be implemented and placed in service to ensure the review process of the reported grant expenditures is documented. Views of Responsible Officials: See Corrective Action Plan.