Finding 23173 (2022-001)

SUMMARY OF AUDIT RESULTS 1. The auditor?s report expresses an unmodified opinion on whether the financial statements of Lincoln School Senior Apartments are prepared and presented in accordance with U.S. generally accepted accounting principles. 2. No material weaknesses or significant deficiencies were identified during the audit of the financial statements. 3. No instances of noncompliance material to the financial statements of Lincoln School Senior Apartments were disclosed during the audit. 4. No material weaknesses or significant deficiencies were identified during the audit of the major federal awards program. 5. The auditor?s report on compliance for major federal awards programs for Lincoln School Senior Apartments expresses an unmodified opinion. 6. There were audit findings relative to the major federal program for Lincoln School Senior Apartments that are required to be reported in accordance with 2 CFR Section 200.516(a) reported in this schedule as Finding 2022-001. 7. The program tested as a major program included: CFDA #14-157 HUD Section 202 - Supportive Housing for the Elderly. 8. The threshold for distinguishing Types A and B programs was $750,000. 9. Lincoln School Senior Apartments was not determined to be a low-risk auditee. FINDINGS ? FINANCIAL STATEMENTS AUDIT NONE. FINDINGS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT S3800-010 Finding Reference Number 2022-001 S3800-011 Title and CFDA Number of Federal Program - 14-157 Supportive Housing for the Elderly S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status - Resolved S3800-017 Information on Universe Population Size ? Not Applicable S3800-018 Sample Size Information ? Not Applicable DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Continued) S3800-010 Finding Reference Number 2022-001(Continued) S3800-019 Identification of Repeat Finding and Finding Reference Number - Not Applicable S3800-020 Criteria ? The HUD Regulatory Agreement requires monthly deposits to a replacement reserve account. S3800-030 Statement of Condition ? All of the deposits were made at year end, but due to availability of funds, three of the twelve deposits were made late. S3800-032 Cause ? Because the Project did not always have sufficient funds to make the required deposit, some deposits were delayed. By the end of the fiscal year all of the deposits had been made. S3800-033 Effect or Potential Effect ? Management did not always follow the requirements of the regulatory agreement of making monthly deposits. S3800-035 Auditor Non-Compliance Code - (N) Replacement Reserve Deposits under Special Tests and Provisions S3800-040 Questioned Costs - $0 S3800-045 Reporting Views of Responsible Officials - Management applied for and received a significant rent increase from HUD that should help improve liquidity so that sufficient funds are available to make the required reserve deposit when due. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127EE034 S3800-038 Questioned Costs - $0 S3800-050 Context ? See statement of condition. S3800-080 Recommendation - Management has taken steps to improve liquidity so that sufficient funds should be available for monthly deposits. Management should ensure those deposits are made monthly. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management concurs with the auditor?s recommendation, and has taken corrective actions to improve liquidity so sufficient funds are available to make the deposits monthly. S3800-130 Response Indicator - Agree S3800-140 Completion Date ? June 20, 2022 S3800-150 Response - Management has taken corrective action and concurs with the auditor?s recommendation.