Finding 29180 (2022-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-04-18
Audit: 25534
Organization: Trinity Terrace (WI)

AI Summary

  • Core Issue: Trinity Terrace, Inc. lacks adequate internal controls for updating replacement reserve deposits as required by the HUD regulatory agreement.
  • Impacted Requirements: Compliance with 2 CFR Part 200, which mandates proper internal controls for federal awards.
  • Recommended Follow-Up: Management should implement procedures to ensure timely updates of replacement reserve deposits to meet compliance standards.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Housing Units Assistance Listing Number: 14.155 Federal Award Identification Number and Year: 075-11186 - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of regulatory agreement. Trinity Terrace, Inc., should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that Trinity Terrace, Inc., did not have adequate internal controls designed to ensure replacement reserve deposits were updated based on the provisions of the regulatory agreement. Questioned costs: None Context: During our testing, it was noted that Trinity Terrace, Inc., did not update the October and November 2022 replacement reserve deposits as prescribed in the regulatory agreement. Cause: Trinity Terrace, Inc., was unaware the bank did not update the October and November 2022 replacement reserve deposits. Effect: Noncompliance with the HUD regulatory agreement. Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are updated timely to ensure compliance with the HUD regulatory agreement. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Replacement Reserve Deposits Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are updated timely to ensure compliance with the HUD regulatory agreement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has developed processes to verify replacement reserve deposits are updated based on the regulatory agreement annually. Name(s) of contact person(s) responsible for corrective action: Nicole Chwala Planned completion date for corrective action plan: April 2023

Categories

HUD Housing Programs Procurement, Suspension & Debarment Allowable Costs / Cost Principles Significant Deficiency Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 29181 2022-003
    Significant Deficiency
  • 605622 2022-002
    Significant Deficiency
  • 605623 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Units $1.93M
14.856 Lower Income Housing Assistance Program (section 8 Moderate Rehabilitation) Housing Assistance Payments $225,515