Audit 8738

FY End
2023-03-31
Total Expended
$1.06M
Findings
4
Programs
2
Organization: Concord Residential Club (CA)
Year: 2023 Accepted: 2023-12-28

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
6790 2023-001 Material Weakness - N
6791 2023-002 Material Weakness - N
583232 2023-001 Material Weakness - N
583233 2023-002 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $709,738 Yes 2
14.195 Section 8 Housing Assistance Payments Program $355,145 - 0

Contacts

Name Title Type
FJEMJ7CSMET1 Sister Marygrace Puchac Auditee
9252852091 John Robison Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: Expenditures reported on 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Concord Residential Club (the Organization) under programs of the federal government for the year ended March 31, 2023. 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on 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.
Title: NOTE 3 INDIRECT COST RATE Accounting Policies: Expenditures reported on 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 4 LOAN GUARANTEE PROGRAM Accounting Policies: Expenditures reported on 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization is financed through a mortgage note which is insured by HUD Supportive Housing for the Elderly (Sect. 202) and secured by a first deed of trust on the land and real property of the Facility (the “Mortgage Note”). The Mortgage Note dated October 1, 1991, in the original amount of $1,243,300, is amortized over 40 years and carries a fixed interest rate of 8.375%. Monthly installments of principal and interest are due in the amount of $8,997. Payments on the Mortgage Note are sent directly to HUD. The activity on this mortgage note for the year ended March 31, 2023 is as follows: Mortgage Note - March 31, 2022 $709,738 Principal payments made during YE 2023 (50,424) Mortgage Note March 31, 2023 $659,314

Finding Details

Statement of condition 2023-1: Concord Residential Club (the Organization) did not deposit all 12 monthly payments ($919.93) to the reserve for replacement bank account. During the year-ended March 31, 2023, only 7 monthly payments were deposited to the bank account with the other 5 payments being deposited subsequent to the year end. Criteria: As indicated in the Regulatory agreement with HUD and the program guidelines in ALN 14.157 Supportive Housing for the Elderly, the amount required by HUD will be deposited monthly in the reserve for replacement bank account. Cause: The Organization had a change in the accounting department and the appropriate procedures were not followed to ensure the monthly deposits to the reserve for replacements were made. Effect: The Organization did not make 5 of the required monthly deposits to the reserve for replacement bank account as required by HUD.Recommendation: The Organization’s management should create controls to ensure the procedures are followed to ensure all deposits to the reserve for replacement account are made monthly.
Statement of condition 2023-2: Concord Residential Club (the Organization) did not submit its annual audit to HUD within the required time frame as required by the Regulatory Agreement with HUD. Criteria: In accordance with HUD's Uniform Financial Reporting Standards rule, annually, the Organization is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The audited financial statements are due 90 days after its fiscal year end. Cause: The Organization did not have the accounting staff in place to prepare the accounting records and required documentation in a timely manner after its year end, and therefore was unable to submit the audited financial statements on time. Effect: The Organization did not submit its audited financial statements on time with HUD. Recommendation: The Organization should have controls in place to ensure the timely submission of the audited financial statements to HUD.
Statement of condition 2023-1: Concord Residential Club (the Organization) did not deposit all 12 monthly payments ($919.93) to the reserve for replacement bank account. During the year-ended March 31, 2023, only 7 monthly payments were deposited to the bank account with the other 5 payments being deposited subsequent to the year end. Criteria: As indicated in the Regulatory agreement with HUD and the program guidelines in ALN 14.157 Supportive Housing for the Elderly, the amount required by HUD will be deposited monthly in the reserve for replacement bank account. Cause: The Organization had a change in the accounting department and the appropriate procedures were not followed to ensure the monthly deposits to the reserve for replacements were made. Effect: The Organization did not make 5 of the required monthly deposits to the reserve for replacement bank account as required by HUD.Recommendation: The Organization’s management should create controls to ensure the procedures are followed to ensure all deposits to the reserve for replacement account are made monthly.
Statement of condition 2023-2: Concord Residential Club (the Organization) did not submit its annual audit to HUD within the required time frame as required by the Regulatory Agreement with HUD. Criteria: In accordance with HUD's Uniform Financial Reporting Standards rule, annually, the Organization is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The audited financial statements are due 90 days after its fiscal year end. Cause: The Organization did not have the accounting staff in place to prepare the accounting records and required documentation in a timely manner after its year end, and therefore was unable to submit the audited financial statements on time. Effect: The Organization did not submit its audited financial statements on time with HUD. Recommendation: The Organization should have controls in place to ensure the timely submission of the audited financial statements to HUD.