FAC Explorer

Audit 54288

FY End
2022-12-31
Total Expended
$1.34M
Findings
2
Programs
3
Organization: Harvard Townhouse, Inc. (NE)
Year: 2022 Accepted: 2023-06-28
Auditor: Core CPAS PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
62497 2022-001 Material Weakness Yes B
638939 2022-001 Material Weakness Yes B

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $300,000 - 0
10.427 Rural Rental Assistance Payments $61,246 - 0
10.415 Rural Rental Housing Loans $41,138 Yes 0

Contacts

Name Title Type
Q38SNW33NM65 Story Schwenk Auditee
4027724091 Jake B Klabenes 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 cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Harvard Townhouse, Inc. has not elected to use the 10% de minimus cost rate as covered in 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.414 Indirect (F&A) costs. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 924069. Rural rental housing loans were distributed to Harvard Townhouse, Inc. These funds were used to construct the rental units. The funds advanced are repayable to the U.S. Department of Agriculture - Rural Development. The balance of the loans at December 31, 2022, was $924,069.
Title: General Statement Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Harvard Townhouse, Inc. has not elected to use the 10% de minimus cost rate as covered in 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.414 Indirect (F&A) costs. The accompanying Schedule of Expenditures of Federal Awards includes the grant activity of Harvard Townhouse, Inc., 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 Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementsfor Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Harvard Townhouse, Inc.

Finding Details

Finding 2022-001
Material Weakness in Internal Control over Financial Reporting ? Inadequate Segregation of Duties Criteria: The segregation of duties and responsibilities between different individuals for custody of assets, recordkeeping for those assets, and reconciliation of those asset accounts is an important control activity needed to adequately protect the entity?s assets and ensure accurate financial reporting. Condition: The Project does not have adequate personnel to assign responsibilities in such a way that different employees handle different portions of a transaction. Context: Due to the limited number of personnel, duties and responsibilities related to custody of assets, recordkeeping for those assets, and reconciliation of those asset accounts cannot be properly segregated. Cause: The Project?s limited size and staffing resources have made it difficult for management to provide sufficient staffing to fully segregate incompatible duties in a cost-effective manner. Effect: An individual controlling a transaction from beginning to conclusion does not have oversight from other individuals to ensure that the transaction was properly executed and recorded. Recommendation: Due to the present size of the staff, it may not be feasible for the Project to correct this situation by the hiring of additional employees, due to cost benefit considerations. We would recommend that the board of Commissioners take an active role in internal controls and closely monitor all accounting functions, while seeking ways to continue to strengthen compensating controls. Auditee Response/Corrective Action Plan: See page 41
Finding 2022-001
Material Weakness in Internal Control over Financial Reporting ? Inadequate Segregation of Duties Criteria: The segregation of duties and responsibilities between different individuals for custody of assets, recordkeeping for those assets, and reconciliation of those asset accounts is an important control activity needed to adequately protect the entity?s assets and ensure accurate financial reporting. Condition: The Project does not have adequate personnel to assign responsibilities in such a way that different employees handle different portions of a transaction. Context: Due to the limited number of personnel, duties and responsibilities related to custody of assets, recordkeeping for those assets, and reconciliation of those asset accounts cannot be properly segregated. Cause: The Project?s limited size and staffing resources have made it difficult for management to provide sufficient staffing to fully segregate incompatible duties in a cost-effective manner. Effect: An individual controlling a transaction from beginning to conclusion does not have oversight from other individuals to ensure that the transaction was properly executed and recorded. Recommendation: Due to the present size of the staff, it may not be feasible for the Project to correct this situation by the hiring of additional employees, due to cost benefit considerations. We would recommend that the board of Commissioners take an active role in internal controls and closely monitor all accounting functions, while seeking ways to continue to strengthen compensating controls. Auditee Response/Corrective Action Plan: See page 41