FAC Explorer

Finding 736 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-10-25
Audit: 1389
Organization: Renaissance Court, INC (OR)
Auditor: Kernutt Stokes

AI Summary

  • Core Issue: There is a significant deficiency in internal controls, leading to missed monthly deposits of $873 into the replacement reserve fund for HUD's Section 811 program.
  • Impacted Requirements: The organization failed to comply with the regulatory agreement requiring total annual deposits of $10,476 into the replacement reserve fund.
  • Recommended Follow-Up: Management should establish and enforce internal controls to ensure timely monthly deposits into the replacement reserve account as mandated by HUD.

Finding Text

Finding 2023-001 Type of Findings: Significant deficiency in internal control over compliance and instance of immaterial noncompliance. Federal Program: HUD Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing #14.181. Compliance Requirement: Replacement Reserve Criteria: Renaissance Court, Inc.'s regulatory agreement with HUD requires monthly deposits of $873 into the replacement reserve fund. Total deposits required annually is $10,476. Condition: The monthly required deposit of $873 and the total annually required deposit of $10,476 were not deposited into replacement reserve fund. Cause: The organization has suffered recuring losses from operations which have negatively impacted cash flows. Effect: The effect is immaterial non-compliance with the terms of the HUD programs listed above. Questioned Costs: None Repeat Finding: No. Context: We reviewed the Replacement Reverse Fund and noticed there was no monthly required deposit made in the Fund during fiscal year 2023. Recommendation: We recommend management design and implement internal controls over compliance to ensure the amount of $873 is deposited monthly into the Replacement Reserve account as required by HUD. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Corrective Action Plan

Renaissance Court respectfully submits the following corrective action plan for the year ended June 30, 2023. Name & address of public accounting firm: Kernutt Stokes 1600 Executive Parkway, Suite 110, Eugene, OR 97401 Audit Period: June 30, 2023 Major Federal Award Findings: Finding Reference #: 2023-001 Significant deficiency Recommendation: We recommend management design and implement internal controls over compliance to ensure the amount of $873 is deposited monthly into the Replacement Reserve account as required by HUD. Corrective Action: Management will work with Cascade Management to improve the internal control procedures to ensure the amount of $873 is deposited monthly into the Replacement Reserve account as required by HUD. Questions regarding this corrective action plan may be directed to Marci Pierce, Chief Financial and Administrative Officer, at (503) 688-2646.

Categories

HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 577178 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $420,000
14.181 Supportive Housing for Persons with Disabilities $142,611