FAC Explorer

Audit 56615

FY End
2022-12-31
Total Expended
$1.91M
Findings
4
Programs
2
Organization: Spectrum Closter Apartments, INC (NJ)
Year: 2022 Accepted: 2023-03-26
Auditor: Mercadien PC Certified Public Accountants

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
60652 2022-002 Significant Deficiency - N
60653 2022-003 Significant Deficiency - N
637094 2022-002 Significant Deficiency - N
637095 2022-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $890,000 Yes 0
14.181 Supportive Housing for Persons with Disabilities $75,000 Yes 2

Contacts

Name Title Type
VZ7KFZDVN953 Danny Rosario Auditee
2013588000 Lovepreet Buttar, CPA Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the Organization 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 Organization, it is not intended to and does not present the financial position, change in net assets or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to the reimbursement. Note 3. Indirect Costs The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES (14.181) - Balances outstanding at the end of the audit period were 949600. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 890000.

Finding Details

Finding 2022-002
Finding: 2022-002 Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) and Capital Advance Criteria or specific requirement: In accordance with the HUD regulatory agreement, the Organization shall establish a replacement reserve account to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements and transfers from the reserve account must be approved by HUD. Condition: The Organization made four transfers out of the replacement reserve account, totaling $18,580, without receiving proper approval from HUD. Cause: Due to operating cash flow shortages, the Organization made transfers as needed without obtaining proper HUD fund authorization. Effect: The transfer of funds out of the replacement reserve account require prior approval from HUD, therefore, the Organization is in violation of the HUD regulatory agreement. Recommendation: We recommend that the Organization obtain proper approval from HUD for all transfers or disbursements being made out of the replacement reserve account prior to the transfer of any funds. Views of responsible officials and planned corrective actions: Management is in agreement with the finding. See Corrective Action Plan.
Finding 2022-003
Finding: 2022-003 Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) and Capital Advance Criteria or specific requirement: In accordance with the HUD memorandum for Section 811 Project Rental Assistance Contract (?PRAC?) properties, the Organization shall establish a residual receipts account to house any surplus funds at the end of the fiscal year. Any balance greater than $250 per unit in a residual receipts account must be remitted to HUD?s Accounting Center upon ?termination? of the PRAC. Termination is defined as expiration of the contract term, which for most PRACs falls on the annual contract anniversary date. Condition: The Organization had excess funds over $250 remaining in the residual receipts account which have not been remitted to HUD upon PRAC termination. Cause: The Organization?s understanding was that payments of excess residual receipts balances were to be made once requested from HUD. Effect: The Organization has not remitted any funds to HUD at the time of the PRAC termination, therefore, it is in violation of the HUD regulatory agreement. Recommendation: We recommend that the organization determine the appropriate excess funds which should be remitted to HUD?s Accounting Center and properly remit those funds on an annual basis upon PRAC termination to remain in compliance. Views of responsible officials and planned corrective actions: Management is in agreement with the finding. See Corrective Action Plan.
Finding 2022-002
Finding: 2022-002 Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) and Capital Advance Criteria or specific requirement: In accordance with the HUD regulatory agreement, the Organization shall establish a replacement reserve account to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements and transfers from the reserve account must be approved by HUD. Condition: The Organization made four transfers out of the replacement reserve account, totaling $18,580, without receiving proper approval from HUD. Cause: Due to operating cash flow shortages, the Organization made transfers as needed without obtaining proper HUD fund authorization. Effect: The transfer of funds out of the replacement reserve account require prior approval from HUD, therefore, the Organization is in violation of the HUD regulatory agreement. Recommendation: We recommend that the Organization obtain proper approval from HUD for all transfers or disbursements being made out of the replacement reserve account prior to the transfer of any funds. Views of responsible officials and planned corrective actions: Management is in agreement with the finding. See Corrective Action Plan.
Finding 2022-003
Finding: 2022-003 Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) and Capital Advance Criteria or specific requirement: In accordance with the HUD memorandum for Section 811 Project Rental Assistance Contract (?PRAC?) properties, the Organization shall establish a residual receipts account to house any surplus funds at the end of the fiscal year. Any balance greater than $250 per unit in a residual receipts account must be remitted to HUD?s Accounting Center upon ?termination? of the PRAC. Termination is defined as expiration of the contract term, which for most PRACs falls on the annual contract anniversary date. Condition: The Organization had excess funds over $250 remaining in the residual receipts account which have not been remitted to HUD upon PRAC termination. Cause: The Organization?s understanding was that payments of excess residual receipts balances were to be made once requested from HUD. Effect: The Organization has not remitted any funds to HUD at the time of the PRAC termination, therefore, it is in violation of the HUD regulatory agreement. Recommendation: We recommend that the organization determine the appropriate excess funds which should be remitted to HUD?s Accounting Center and properly remit those funds on an annual basis upon PRAC termination to remain in compliance. Views of responsible officials and planned corrective actions: Management is in agreement with the finding. See Corrective Action Plan.