FAC Explorer

Audit 50602

FY End
2022-12-31
Total Expended
$11.17M
Findings
2
Programs
1
Organization: Jennings Real Estate, LLC (OH)
Year: 2022 Accepted: 2023-05-31
Auditor: Maloney + Novotny LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
51074 2022-001 - - C
627516 2022-001 - - C

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $11.17M Yes 1

Contacts

Name Title Type
E7EKHEZKMRJ6 Matt Bollin Auditee
2165812900 Mike Mullee Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances 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 in reimbursement De Minimis Rate Used: Y Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. MORTGAGE INSURANCE_NURSING HOMES, INTERMEDIATE CARE FACILITIES, BOARD AND CARE HOMES AND ASSISTED LIVING FACILITIES (14.129) - Balances outstanding at the end of the audit period were 11696666.
Title: U.S. Department of Housing and Urban Development Loan 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 in reimbursement De Minimis Rate Used: Y Rate Explanation: The Project has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Project received a U.S. Department of Housing and Urban Development direct loan under Section 232 of the National Housing Act. The loan amount at the beginning of the year is included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at December 31, 2022 was $11,696,666.

Finding Details

Finding 2022-001
1. Finding No. 2022-001: Section 232, Late Deposit of Surplus Cash Condition: A deficiency in internal control over compliance existed due to the prior year excess Surplus Cash amounts not being deposited into the residual receipts account within ninety days after the end of annual fiscal period for which Surplus Cash was calculated. Criteria: Internal controls over compliance should be in place to ensure the deposit of Surplus Cash into the residual receipts account occurs within ninety days after year end. Cause: The Company did not make a timely deposit upon receipt of the audited financial statements. This deposit was not made until correspondence was received from HUD's Real Estate Assessment Center ("REAC"). This correspondence also identified the deposit amounts required to be made to the residual receipts account. Effect: This deficiency resulted in the Company's noncompliance with the required deposit of Surplus Cash to the residual receipts account. Recommendation: The Company should adhere to internal procedures to ensure that Surplus Cash is deposited within ninety days after the end of annual fiscal period for which Surplus Cash is calculated. Views of Responsible Officials and Planned Corrective Actions: Management of Jennings Real Estate, LLC is in agreement with the finding and the auditor's recommendation to adhere to internal procedures.
Finding 2022-001
1. Finding No. 2022-001: Section 232, Late Deposit of Surplus Cash Condition: A deficiency in internal control over compliance existed due to the prior year excess Surplus Cash amounts not being deposited into the residual receipts account within ninety days after the end of annual fiscal period for which Surplus Cash was calculated. Criteria: Internal controls over compliance should be in place to ensure the deposit of Surplus Cash into the residual receipts account occurs within ninety days after year end. Cause: The Company did not make a timely deposit upon receipt of the audited financial statements. This deposit was not made until correspondence was received from HUD's Real Estate Assessment Center ("REAC"). This correspondence also identified the deposit amounts required to be made to the residual receipts account. Effect: This deficiency resulted in the Company's noncompliance with the required deposit of Surplus Cash to the residual receipts account. Recommendation: The Company should adhere to internal procedures to ensure that Surplus Cash is deposited within ninety days after the end of annual fiscal period for which Surplus Cash is calculated. Views of Responsible Officials and Planned Corrective Actions: Management of Jennings Real Estate, LLC is in agreement with the finding and the auditor's recommendation to adhere to internal procedures.