FAC Explorer

Finding 42465 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-28
Audit: 39155
Organization: Alamo Area Mutual Housing Association (TX)
Auditor: M Group LLP

AI Summary

  • Core Issue: The security deposit liability account exceeded the security deposit asset account for three properties, violating HUD regulations.
  • Impacted Requirements: HUD regulations mandate that the security deposit asset account must always be greater than the liability account.
  • Recommended Follow-Up: Management should review the Regulatory Agreement and ensure compliance, while also considering a change in property management to prevent future issues.

Finding Text

Finding #2022-001: Section 223(a)(7) HUD Insured Loan, CFDA 14.135 (AAMHA Western Hills, LLC HUD Project No. 115-35888) and Section 223(f) HUD Insured Loan, CFDA 14.155 (AAMHA Cypress Cove, LLC HUD Project No. 115-11254 and AAMHA Calcasieu, LLC HUD Project No. 115-11280). Type of Finding: Significant deficiency. The security deposit liability account was greater than the security deposit asset account for three operating properties (AAMHA Western Hills, LLC, AAMHA Cypress Cove, LLC and AAMHA Calcasieu, LLC). See Section II for more information. Finding #2022-001: Section 223(a)(7) HUD Insured Loan, CFDA 14.135 (AAMHA Western Hills, LLC HUD Project No. 115-35888) and Section 223(f) HUD Insured Loan, CFDA 14.155 (AAMHA Cypress Cove, LLC HUD Project No. 115-11254 and AAMHA Calcasieu, LLC HUD Project No. 115-11280) Type of Finding: Significant Deficiency Condition: The security deposit liability account was greater than the security deposit asset account for three operating properties (AAMHA Western Hills, LLC, AAMHA Cypress Cove, LLC and AAMHA Calcasieu, LLC). Criteria: The HUD regulatory agreement requires the security deposit asset account exceed the security deposit liability account at all times. Questioned Costs: $65,358 Effect: The Company is in violation of the terms of the HUD Regulatory Agreement governing security deposits. Cause: Operating costs Repeat Finding: No (AAMHA Western Hills, LLC and AAMHA Cypress Cove, LLCYes (AAMHA Calcasieu, LLC) Recommendation: We recommend management review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. Management?s Comment: Management is in agreement with finding and will review Regulatory agreement. Management transferred the funds to cover the underfunding of the security deposit asset account for the operating property. Management has re-evaluated the property management company due to the underfunding of the security deposit account and has plans to hire a new management company effective July 1, 2023. Auditor?s Comment: On April 3, 2023, $15,079 was transferred to the security deposit asset account for AAMHA Western Hills, LLC. On March 20, 2023, $30,413 was transferred to the security deposit asset account for AAMHA Cypress Cove, LLC. On March 14, 2023, $19,866 was transferred to the security deposit asset account for AAMHA Calcasieu, LLC. Finding 2022-001 cleared

Corrective Action Plan

CORRECTIVE ACTION PLAN Name and Number of the Project: See Below Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2022 Project Name: AAMHA Western Hills, LLC; HUD Project No. 115-35888; Amount $15,079 AAMHA Cypress Cove, LLC; HUD Project No. 115-11254; Amount $30,413 AAMHA Calcasieu, LLC; HUD Project No. 115-11280; Amount $19,866 Total $65,358 Compliance Review A. COMMENTS ON FINDINGS AND RECOMMENDATIONS We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. ACTIONS TAKEN FINDING 2022-001: Section 223(a)(7) HUD Insured Loan, CFDA 14.135 and Section 223(f) HUD Insured Loan, CFDA 14.155 CORRECTIVE ACTION COMPLETED: On April 3, 2023, the Company deposited $15,079 to fund the security deposit account for AAMHA Western Hill, LLC. On March 20, 2023, the Company deposited $30,413 to fund the security deposit account for AAMHA Cypress Cove, LLC. On March 14, 2023, the Company deposited $19,866 to fund the security deposit account for AAMHA Calcasieu, LLC. Finding 2022-001 Cleared. We have prepared the corrective action plan as required by the standards applicable to financial statements contained in Government Auditing Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards. Any questions regarding the above corrective action plan should be directed to Brandi Vitier, Board Member.

Categories

HUD Housing Programs Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 42464 2022-002
    Significant Deficiency Repeat
  • 42466 2022-001
    Significant Deficiency
  • 42467 2022-003
    Significant Deficiency
  • 42468 2022-001
    Significant Deficiency Repeat
  • 618906 2022-002
    Significant Deficiency Repeat
  • 618907 2022-001
    Significant Deficiency
  • 618908 2022-001
    Significant Deficiency
  • 618909 2022-003
    Significant Deficiency
  • 618910 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $6.90M
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.17M
14.239 Home Investment Partnerships Program $816,795
14.218 Community Development Block Grants/entitlement Grants $800,650
21.000 Capital and Expendable Grants $325,044
14.267 Continuum of Care Program $147,042
14.871 Section 8 Housing Choice Vouchers $18,942
21.019 Coronavirus Relief Fund $13,118