FAC Explorer

Audit 47723

FY End
2022-01-31
Total Expended
$3.19M
Findings
4
Programs
2
Organization: Mount Pleasant Good Samaritan Hsg Dba Mt Pleasant Place 075-11072-Ref (SD)
Year: 2022 Accepted: 2022-11-06
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
47164 2022-002 Significant Deficiency - N
47165 2022-003 Significant Deficiency - I
623606 2022-002 Significant Deficiency - N
623607 2022-003 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.53M Yes 2
14.195 Section 8 Housing Assistance Payments Program $659,601 - 0

Contacts

Name Title Type
SJCMRBUAHEJ1 Joel Fluit Auditee
6059129354 Angie Hillestad Auditor
No contacts on file

Notes to SEFA

Title: Mortgage Payable Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Project does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Project has a mortgage note payable to a third-party banking institution and the mortgage is insured by HUD. The mortgage is secured by substantially all of Projects fixed assets and accrues interest at 4.70% per year on the unpaid principal. Principal and interest are payable by the Project in monthly installments of $14,567, with final maturity in April 2045. Expenditures reported in this schedule consist of the beginning of the period outstanding loan balance. There were no advances made on the mortgage during the year. As of January 31, 2022, the balance of the mortgage was $2,469,483.
Title: Basis of Presentation Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Project does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Mount Pleasant Place, HUD Project Number 075-11072-REF (the Project), under programs of the federal government for the period ended January 31, 2022. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does no present the financial position, changes in net assets, or cash flows of the Project.

Finding Details

Finding 2022-002
2022-002 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase of Refinancing of Existing Multifamily Housing Projects Special Tests and Provisions: Property and Operations, Distributions, and Reimbursement of Advances Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Our testing of the use of Project funds detected one instance where an employee?s timesheet was not approved and one instance where an employee?s timesheet was approved after payroll; however, we were unable to determine whether the review occurred within a reasonable amount of time after the payroll period. Cause: There was a lapse in oversight of the internal control process designed to ensure timesheets are properly approved and approved within a reasonable amount of time after the payroll period. Effect: Lack of compliance with designed internal controls over use of Project funds could adversely affect the Project?s compliance with HUD regulations. Questioned Costs: $0 Context/Sampling: A nonstatistical sample of 60 of the Project?s 660 disbursements ($235,759 of $1,234,314 total disbursements), including payroll and non-payroll, was selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend the Project review policies and procedures with applicable employees and remind them of the importance of established review and monitoring processes. Views of Responsible Officials: Management agrees with the finding and the recommendation.
Finding 2022-003
2022-003 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase of Refinancing of Existing Multifamily Housing Projects Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: Our testing identified the Project transacted more than $25,000 with a vendor but did not retain documentation to support verification that the vendor was not included as an excluded party within the System for Award Management (SAM). Cause: There was a lapse in oversight of the internal control process over suspension and debarment. Effect: The Project could execute a covered transaction with a party that is suspended or debarred or otherwise excluded. Questioned Costs: None Reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend the Project?s sponsor review its policies and procedures to ensure all vendors are compared to the SAM and documentation is retained before the Project executes a covered transaction. Views of Responsible Officials: Management agrees with the finding and the recommendation.
Finding 2022-002
2022-002 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase of Refinancing of Existing Multifamily Housing Projects Special Tests and Provisions: Property and Operations, Distributions, and Reimbursement of Advances Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Our testing of the use of Project funds detected one instance where an employee?s timesheet was not approved and one instance where an employee?s timesheet was approved after payroll; however, we were unable to determine whether the review occurred within a reasonable amount of time after the payroll period. Cause: There was a lapse in oversight of the internal control process designed to ensure timesheets are properly approved and approved within a reasonable amount of time after the payroll period. Effect: Lack of compliance with designed internal controls over use of Project funds could adversely affect the Project?s compliance with HUD regulations. Questioned Costs: $0 Context/Sampling: A nonstatistical sample of 60 of the Project?s 660 disbursements ($235,759 of $1,234,314 total disbursements), including payroll and non-payroll, was selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend the Project review policies and procedures with applicable employees and remind them of the importance of established review and monitoring processes. Views of Responsible Officials: Management agrees with the finding and the recommendation.
Finding 2022-003
2022-003 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase of Refinancing of Existing Multifamily Housing Projects Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: Our testing identified the Project transacted more than $25,000 with a vendor but did not retain documentation to support verification that the vendor was not included as an excluded party within the System for Award Management (SAM). Cause: There was a lapse in oversight of the internal control process over suspension and debarment. Effect: The Project could execute a covered transaction with a party that is suspended or debarred or otherwise excluded. Questioned Costs: None Reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend the Project?s sponsor review its policies and procedures to ensure all vendors are compared to the SAM and documentation is retained before the Project executes a covered transaction. Views of Responsible Officials: Management agrees with the finding and the recommendation.