Audit 8533

FY End
2022-06-30
Total Expended
$10.94M
Findings
2
Programs
2
Year: 2022 Accepted: 2023-12-27

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
6598 2022-003 Significant Deficiency - N
583040 2022-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $10.77M Yes 1
93.498 Provider Relief Fund $171,304 - 0

Contacts

Name Title Type
QHH4ZFKJ8AA3 Tara Holzem Auditee
9204582137 Amy Vehrs Auditor
No contacts on file

Notes to SEFA

Title: Note 1 Basis of Presentation Accounting Policies: Expenditures in the schedule are reported on the accrual basis of accounting. Such expenditures are recongized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization uses a cost allocation plan based on the number of transactions. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Sheboygan Senior Community, Inc. and Affiliate (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 the Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements.
Title: Note 2 Significant Accounting Policies Accounting Policies: Expenditures in the schedule are reported on the accrual basis of accounting. Such expenditures are recongized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization uses a cost allocation plan based on the number of transactions. Expenditures in 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 as to reimbursement. The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 3 Reconciliation to Consolidated Financial Statements Accounting Policies: Expenditures in the schedule are reported on the accrual basis of accounting. Such expenditures are recongized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The organization uses a cost allocation plan based on the number of transactions. The consolidated financial statements reflect revenue recognized from the Provider Relief Fund (PRF) of $103,183 and $278,818 for the years ended June 30, 2022 and 2021, respectively. The SEFA includes Provider Relief Funds of $171,304 that were received in PRF Period 2 and Period 3 in accordance with the requirements of the compliance supplement for assistance listing number 93.498.

Finding Details

Finding 2022-003 Federal Agency: U.S. Department of Agriculture Federal Program Name: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonmaterial Noncompliance. Compliance Requirement: Borrowers shall establish accounts into which borrower funds shall be deposited in accordance with the loan resolutions authorizing the incurrence of indebtedness related to the Agency loan proceeds. Criteria or Specific Requirement: The Organization’s loan resolutions require establishment of a general account and reserve account. The accounts will be maintained in accordance with the loan resolutions as long as the authorized indebtedness to the agency is outstanding. Per the loan resolutions, the Organization shall set aside into the reserve account the sum of $521,016. Condition: No separate reserve account has been established. All funds related to the loan resolutions’ deposit requirements are retained in the general account. Questioned Costs: None Context: The Organization maintains sufficient deposits to meet the debt service reserve requirements in accordance with the loan resolutions. The resolutions require that certain reserves be deposited into distinct accounts. A separate reserve account was not established in accordance with those requirements. Cause: Management was not aware of the requirement for a separate reserve account. Effect: As a result of this condition, the Organization was not in compliance with the loan resolutions. This did not result in any questioned costs or material noncompliance. Recommendation: The Organization should establish a separate reserve as set forth in the loan resolutions. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-003 Federal Agency: U.S. Department of Agriculture Federal Program Name: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Award Period: July 1, 2021 - June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonmaterial Noncompliance. Compliance Requirement: Borrowers shall establish accounts into which borrower funds shall be deposited in accordance with the loan resolutions authorizing the incurrence of indebtedness related to the Agency loan proceeds. Criteria or Specific Requirement: The Organization’s loan resolutions require establishment of a general account and reserve account. The accounts will be maintained in accordance with the loan resolutions as long as the authorized indebtedness to the agency is outstanding. Per the loan resolutions, the Organization shall set aside into the reserve account the sum of $521,016. Condition: No separate reserve account has been established. All funds related to the loan resolutions’ deposit requirements are retained in the general account. Questioned Costs: None Context: The Organization maintains sufficient deposits to meet the debt service reserve requirements in accordance with the loan resolutions. The resolutions require that certain reserves be deposited into distinct accounts. A separate reserve account was not established in accordance with those requirements. Cause: Management was not aware of the requirement for a separate reserve account. Effect: As a result of this condition, the Organization was not in compliance with the loan resolutions. This did not result in any questioned costs or material noncompliance. Recommendation: The Organization should establish a separate reserve as set forth in the loan resolutions. Views of responsible officials: There is no disagreement with the audit finding.