Finding 484703 (2023-002)

- Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-08-20
Audit: 317585
Organization: Sunray Communities, Inc. (TX)
Auditor: M Group LLP

AI Summary

  • Core Issue: The Company only made 7 out of the required 12 monthly deposits into the replacement reserve account.
  • Impacted Requirements: This non-compliance with HUD regulations could lead to financial penalties.
  • Recommended Follow-Up: The Company should continue to monitor deposits and consider requesting a suspension from HUD if funds are insufficient.

Finding Text

Finding #2023-002: Section 202 Capital Advance, Assistance Listing 14.157 Type of Finding: Other Matter Condition: The Company made 7 monthly deposits into the replacement reserve account. Criteria: The HUD regulatory agreement requires the Company to make 12 monthly deposits into the replacement reserve account. Effect: The Company is not in compliance with the HUD regulatory agreement. Questioned Cost: $6,000 Cause: Lack of available funds Repeat Finding: Yes Recommendation: The Company should monitor the monthly deposits and should request a suspension in replacement reserve deposits from HUD. Auditor’s Comment: During December 2023, the Company obtained an approval from HUD to suspend monthly deposits to the replacement reserve account for 2024 as it was determined that the replacement reserve account was overfunded. Finding 2023-002 cleared.

Corrective Action Plan

CORRECTIVE ACTION PLAN Name and Number of the Project: Sunray Communities, Inc. No. 112-EE003 Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2023 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. FINDING 2: Section 202 Capital Advance, Assistance Listing 14.157 CORRECTIVE ACTION COMPLETED: HUD approved the suspension of monthly deposits to the replacement reserve account for 2024 due to the account being overfunded in prior years. Finding 2023- 002 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 US. 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 Ms. Connie Quillen, Vice President, Asset Living.

Categories

Procurement, Suspension & Debarment HUD Housing Programs

Other Findings in this Audit

  • 484702 2023-001
    Significant Deficiency
  • 1061144 2023-001
    Significant Deficiency
  • 1061145 2023-002
    - Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $178,853