Audit 49343

FY End
2022-12-31
Total Expended
$2.83M
Findings
2
Programs
3
Year: 2022 Accepted: 2023-09-28

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
61298 2022-001 Significant Deficiency - N
637740 2022-001 Significant Deficiency - N

Contacts

Name Title Type
TSFDV6YR8RJ9 Eric Golden Auditee
3014758966 Stewart Grubman Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement.The Schedule includes the federal award activity of Cedar Lane Senior Living Community II, Inc. (the Entity) under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the financial position, change in net assets or cash flows of the Entity. De Minimis Rate Used: N Rate Explanation: The Entity has elected not to use the 10-percent de minimis indirect cost rate allowable under the Uniform Guidance. The Entity is reimbursed for programmatic and administrative costs in accordance with rules set forth by the U.S. Department of Housing and Urban Development. MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS (14.155) - Balances outstanding at the end of the audit period were $2,064,060.
Title: Federal Loan Program Accounting Policies: Expenditures reported on the schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement.The Schedule includes the federal award activity of Cedar Lane Senior Living Community II, Inc. (the Entity) under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the financial position, change in net assets or cash flows of the Entity. De Minimis Rate Used: N Rate Explanation: The Entity has elected not to use the 10-percent de minimis indirect cost rate allowable under the Uniform Guidance. The Entity is reimbursed for programmatic and administrative costs in accordance with rules set forth by the U.S. Department of Housing and Urban Development. The Entity has received a U.S. Department of Housing and Urban Development insured loan under Section 207 pursuant to Section 223(f) of the National Affordable Housing Act of 1974. The loan balance outstanding at the beginning of the year for the Supportive Housing loan is included in the federal expenditures presented in the Schedule.

Finding Details

Finding 2022-001: Mortgage Insurance for the purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Information on the Universe Population Size All HUD mandated cash accounts Sample Size Information All HUD mandated cash accounts Identification of Repeat Finding Reference Number No Criteria During review of cash management activities, it was noted that the Entity had a disproportionate share of payroll expenses paid on behalf of a related party and these amounts were not repaid by the related party in a timely manner. Statement of Condition Large balances of intercompany receivables existed at December 31, 2022, that should have been reimbursed. Cause The Entity is self-managed and reimburses a related party who pays all employees who provide services to the Project. Effect or Potential Effect Excess balances of cash and intercompany payables were recorded at December 31, 2022. Auditor Non-Compliance Code Z ? Other Questioned Costs There were no known questioned costs. Recommendation Management should reconcile intercompany activity in a timely manner and reimburse related parties as activities occur. Views of Responsible officials See corrective action plan.
Finding 2022-001: Mortgage Insurance for the purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Information on the Universe Population Size All HUD mandated cash accounts Sample Size Information All HUD mandated cash accounts Identification of Repeat Finding Reference Number No Criteria During review of cash management activities, it was noted that the Entity had a disproportionate share of payroll expenses paid on behalf of a related party and these amounts were not repaid by the related party in a timely manner. Statement of Condition Large balances of intercompany receivables existed at December 31, 2022, that should have been reimbursed. Cause The Entity is self-managed and reimburses a related party who pays all employees who provide services to the Project. Effect or Potential Effect Excess balances of cash and intercompany payables were recorded at December 31, 2022. Auditor Non-Compliance Code Z ? Other Questioned Costs There were no known questioned costs. Recommendation Management should reconcile intercompany activity in a timely manner and reimburse related parties as activities occur. Views of Responsible officials See corrective action plan.