Finding Text
S3800-010: Finding Reference Number
2023-001 (Material Weakness)
S3800-011: Program Information
Federal Program: Supportive Housing for Persons with Disabilities (Sec 811)
Federal Agency: Department of Housing and Urban Development (HUD)
Assistance Listing #: 14.181
Pass-through Entity: None
Federal Award Identification Number and Year: N/A
Type of Compliance Findings: A/B - Activities Allowed or Unallowed and Allowable Costs/Cost Principles, C – Cash Management, E – Eligibility, and N – Special Tests and Provisions
S3800-015: Type of Finding
Financial Statement and Federal Awards
S3800-016: Finding Resolution Status
Unresolved
S3800-017: Information on Universe Population Size
Unknown
S3800-018: Sample Size Information
N/A
S3800-019: Identification of Repeat Finding and Finding Reference Number
2022-001
S3800-020: Criteria
The regulatory agreement requires that the Organization’s books and records are maintained in accordance with generally accepted accounting principles (GAAP).
S3800-030: Statement of Condition
During our audit of the Organization’s fiscal year ended June 30, 2023 financial statements and federal award program, we noted the below concerns regarding completeness of the financial records and adherence to compliance requirements:
• Supporting documentation to evaluate the amounts reported in the financial statements was not available.
• Supporting documentation to evaluate Activities Allowed or Unallowed and Allowable Costs/Cost Principles was not available.
• Supporting documentation to evaluate Cash Management was not available.
• Supporting documentation to evaluate Eligibility was not available.
• Supporting documentation to evaluate Special Tests and Provisions for the following criteria were not available: o Replacement reserve
o Management fees charged in accordance with HUD-9839B
o Move-outs (security deposits), evictions, waitlist applicants and rejected applicants, and work-orders / maintenance requests
S3800-032: Cause
Complete records were not provided by the predecessor management company.
S3800-033: Effect or Potential Effect
We have not obtained sufficient audit evidence to express an opinion on the accompanying financial statements and federal award program due to the inability to perform substantive auditing procedures.
S3800-035: Auditor Non-Compliance Code
Z - Other
S3800-040: Questioned Costs
Unknown
S3800-045: Reporting Views of Responsible Officials
Management reported that the failure(s) involved records related to the period managed by the predecessor management company.
S3800-050: Context
The Organization is required to maintain books and records in accordance with GAAP. The Organization terminated its agreement with the predecessor management agent and the current management agent took over this property on August 25, 2023, after the fiscal year-end.
S3800-080: Recommendation
We note these non-compliant findings involve records related to the period managed by the predecessor management agent; therefore, we do not have a recommendation regarding the period managed by the predecessor management agent.
However, the current management agent should request and keep all required documentation from HUD and establish processes and procedures to ensure compliance with the Regulatory Agreement and / or Capital Advance Use Agreement.
S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations
Concur
S3800-130: Response Indicator
Agree S3800-140: Completion Date or Proposed Completion Date
June 30, 2024
S3800-150: Response