FAC Explorer

Audit 51573

FY End
2022-06-30
Total Expended
$1.54M
Findings
2
Programs
1
Organization: Lincoln Towers Housing Development Fund Co., Inc. (NY)
Year: 2022 Accepted: 2023-03-30
Auditor: Withumsmith+brown PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
47350 2022-001 Material Weakness - P
623792 2022-001 Material Weakness - P

Programs

ALN Program Spent Major Findings
14.195 Section 8 Housing Assistance Payments Program $1.54M Yes 1

Contacts

Name Title Type
L674C8SKKJC7 Raymond Prema Auditee
9145925434 Joseph J. Perez Auditor
No contacts on file

Notes to SEFA

Accounting Policies: 1.GENERAL INFORMATION The accompanying schedule of expenditures of federal awards (the Schedule) presents the activities in all federal awards of Lincoln Towers Housing Development Fund Co., Inc. (the Organization). All financial assistance received directly from federal agencies as well as financial assistance passed through other governmental agencies or nonprofit organizations are included on the Schedule.2.BASIS OF ACCOUNTING The Schedule is presented using the accrual basis of accounting. The amounts reported in the Schedule may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either cash or a modified cash basis of accounting.3.RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Federal expenditures are reported on the statement of activities as operating expenses before depreciation. The expenditures reported in the basic financial statements may differ from the expenditures reported in the Schedule due to program expenditures exceeding grant or contract budget limitations or agency matching or in-kind contributions that are not included as federal awards.4.BASIS OF PRESENTATION The accompanying Schedule includes the federal award activity of the Organization under programs of the federal government for the year ended June 30, 2022. The information in the 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.5.INDIRECT COSTS The Organization does not have a federally negotiated indirect cost rate and has not elected to use the 10% de minimis rate as covered in Section 200.414 in the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee does not have a federally negotiated indirect cost rate and has not elected to use the 10% de minimis cost rate.

Finding Details

Finding 2022-001
Finding No. 2022-001 (Material Weakness): Criteria: There were errors related to accounting for non- marketable securities and amortization of debt issuance costs resulting in cumulatively material errors requiring restatement of previously issued financial statements. Condition: The financial reporting process was not sufficiently designed to effectively detect and prevent the issuance of financial statements with cumulatively material errors in certain account balances. Context: Audit procedures over investments revealed immaterial variances with investment statements and an accounting policy selection for non-marketable securities that did not follow Generally Accepted Accounting Principles in the United States of America (?US GAAP?). Furthermore, audit procedures over debt issuance costs revealed that the accounting policy election to amortize such costs on a straight-line basis did not follow US GAAP. Cause: The Organization adopted an incorrect accounting policy for recognizing non-marketable securities on their balance sheets and an incorrect policy election to amortize debt issuance cost over the term of the related debt obligation. Effect: The fair value and cost of investments were overstated, and net assets and financial expenses were understated, in the previously issued financial statements. Recommendation: Management should strengthen procedures for selecting appropriate accounting policies for significant items impacting their balance sheets. Such policies and resulting accounting should include processes that more closely follow published authoritative guidelines for initial recognition and subsequent measurement of assets and liabilities on the books and records. Response: Management concurs with the finding and restated the prior year financial statements.
Finding 2022-001
Finding No. 2022-001 (Material Weakness): Criteria: There were errors related to accounting for non- marketable securities and amortization of debt issuance costs resulting in cumulatively material errors requiring restatement of previously issued financial statements. Condition: The financial reporting process was not sufficiently designed to effectively detect and prevent the issuance of financial statements with cumulatively material errors in certain account balances. Context: Audit procedures over investments revealed immaterial variances with investment statements and an accounting policy selection for non-marketable securities that did not follow Generally Accepted Accounting Principles in the United States of America (?US GAAP?). Furthermore, audit procedures over debt issuance costs revealed that the accounting policy election to amortize such costs on a straight-line basis did not follow US GAAP. Cause: The Organization adopted an incorrect accounting policy for recognizing non-marketable securities on their balance sheets and an incorrect policy election to amortize debt issuance cost over the term of the related debt obligation. Effect: The fair value and cost of investments were overstated, and net assets and financial expenses were understated, in the previously issued financial statements. Recommendation: Management should strengthen procedures for selecting appropriate accounting policies for significant items impacting their balance sheets. Such policies and resulting accounting should include processes that more closely follow published authoritative guidelines for initial recognition and subsequent measurement of assets and liabilities on the books and records. Response: Management concurs with the finding and restated the prior year financial statements.