FAC Explorer

Audit 54157

FY End
2022-09-30
Total Expended
$3.99M
Findings
2
Programs
3
Organization: Volunteer Residences-Two, Inc. (TN)
Year: 2022 Accepted: 2023-01-15
Auditor: Purkey Carter Compton Swann & Carter PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
62122 2022-001 Significant Deficiency - P
638564 2022-001 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.60M Yes 1
14.191 Multifamily Housing Service Coordinators $3,217 - 0
14.195 Section 8 Housing Assistance Payments Program $993 - 0

Contacts

Name Title Type
YNZSYL73ME58 Mary Hazelwood Auditee
4235861494 Natasha Moore, CPA Auditor
No contacts on file

Notes to SEFA

Title: NOTE B - U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal award activity of Volunteer Residences-Two, Inc. and is presented on the full accrual basis of accounting. 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 Projects, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Projects. De Minimis Rate Used: Y Rate Explanation: NOTE C - DE MINIMIS INDIRECT COST RATE When applicable, Volunteer Residences - Two, Inc. has elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Volunteer Residences - Two, Inc. has received a U.S. Department of Housing and Urban Development HUD Insured loan under section 223 (f) of the National Housing Act. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Volunteer Residences-Two, Inc. received no additional loans during the year. The balance of the loan outstanding at September 30, 2022 consists of: Outstanding Balance at CFDA Number Program Name September 30, 2022 14.155 223(f) HUD Insured Loan $3,512,918

Finding Details

Finding 2022-001
FINDING NO. 2022-001: INEFFECTIVE OVERSIGHT AND OPERATION OF INTERNAL CONTROLS OVER COMPLIANCE BY MANAGEMENT The Project manager at two out of the three complexes did not follow all HUD requirements when performing the tenant recertification process. The tenant files tested for internal controls over compliance contained multiple deficiencies, including missing manager signatures and dates on HUD Form 50059 and HUD Forms 9887/A; missing tenant signatures and dates on HUD Form 50059, citizenship declaration, and HUD Forms 9887/A; missing spouse signatures and dates on HUD Form 50059, HUD Forms 9887/A, and lease; and incorrect calculation of tenant assets. CRITERIA: According to the HUD Handbook 4350.3: 1. The HUD-50059 certifications must be signed and dated by the manager, tenant, and spouse (if applicable). 2. The lease must be signed and dated by head-of-household, spouse, cohead (if applicable), and any adult family members and the manager. 3. The HUD-9887 and HUD-9887A must be signed by the tenant, manager, and spouse (if applicable). 4. Owners must verify all income, assets, expenses, deductions, family characteristics, and circumstances that affect family eligibility or level of assistance; for savings accounts, use the current balance and for checking accounts, use the average balance for the last six months. 5. Citizens must sign declaration certifying U.S. Citizenship. CAUSE OF CONDITION: The management agent did not have proper systems in place to ensure that all documents are completed per HUD requirements pursuant to HUD Handbook 4350.3. RECOMMENDATION: Auditor recommends management agent review HUD Handbook 4350.3 and put proper internal controls in place to ensure manager of the Project is trained on the handbook and is complying with all applicable requirements pursuant to HUD Handbook 4350.3.
Finding 2022-001
FINDING NO. 2022-001: INEFFECTIVE OVERSIGHT AND OPERATION OF INTERNAL CONTROLS OVER COMPLIANCE BY MANAGEMENT The Project manager at two out of the three complexes did not follow all HUD requirements when performing the tenant recertification process. The tenant files tested for internal controls over compliance contained multiple deficiencies, including missing manager signatures and dates on HUD Form 50059 and HUD Forms 9887/A; missing tenant signatures and dates on HUD Form 50059, citizenship declaration, and HUD Forms 9887/A; missing spouse signatures and dates on HUD Form 50059, HUD Forms 9887/A, and lease; and incorrect calculation of tenant assets. CRITERIA: According to the HUD Handbook 4350.3: 1. The HUD-50059 certifications must be signed and dated by the manager, tenant, and spouse (if applicable). 2. The lease must be signed and dated by head-of-household, spouse, cohead (if applicable), and any adult family members and the manager. 3. The HUD-9887 and HUD-9887A must be signed by the tenant, manager, and spouse (if applicable). 4. Owners must verify all income, assets, expenses, deductions, family characteristics, and circumstances that affect family eligibility or level of assistance; for savings accounts, use the current balance and for checking accounts, use the average balance for the last six months. 5. Citizens must sign declaration certifying U.S. Citizenship. CAUSE OF CONDITION: The management agent did not have proper systems in place to ensure that all documents are completed per HUD requirements pursuant to HUD Handbook 4350.3. RECOMMENDATION: Auditor recommends management agent review HUD Handbook 4350.3 and put proper internal controls in place to ensure manager of the Project is trained on the handbook and is complying with all applicable requirements pursuant to HUD Handbook 4350.3.