GENESIS HOMES, INC.Non-Profit

SECTION III -- FEDERAL AWARDS FINDINGS Finding 2024-001: Information on the Federal Program : 14.239 - Home Investment Partnership Program, United States Department of Housing and Urban Development. Pass-Through Entity: South Carolina State Housing Finance and Development Authority. Award Number: M19-SG450252. Compliance Requirements: Eligibility. Type of Finding: Noncompliance. Criteria: The U.S. Department of Housing and Urban Development (HUD) requires that tenants of HOME-assisted rental housing be income-eligible at initial occupancy and that their income be recertified annually to ensure ongoing compliance with HOME requirements. Condition: During our testing of tenant files for HOME-assisted units, we noted that annual income recertifications were not performed for certain tenants. Specifically, two out of five tenant files reviewed did not contain documentation of a recertification within the required 12-month period. Cause: The Organization did not have adequate controls in place to ensure timely completion and documentation of annual recertifications. Effect or Potential Effect: Failure to perform and document annual income recertifications increases the risk that ineligible tenants may occupy HOME-assisted units or that tenant rents may exceed allowable limits. This represents noncompliance with HUD requirements and may result in questioned costs or potential repayment obligations to HUD if tenants are found to be ineligible. Context: We tested 5 tenant files for compliance with the annual income recertification requirements. Of these, 2 files did not contain documentation of an income recertification within the required 12-month period. Recommendation : We recommend that the Organization strengthen controls over the annual recertification process. Views of Responsible Official: Management of the Organization is in agreement with this finding, and has implemented proper policies and procedures to ensure the annual recertification is completed properly.

Finding 2021-002 Information on the Federal Program : Assistance Listing Number 14.239 - Home Investment Partnership Program, United States Department of Housing and Urban Development. Pass-Through Entity: South Carolina State Housing Finance and Development Authority. Type of Finding: Noncompliance Criteria: 45 CFR Part 75, Subpart F, requires recipients expending $750,000 or more in Federal awards during their fiscal year to complete Single Audit and submit related reports to the Federal Audit Clearinghourse within nine months after their year end. Condition: For the year ended December 31, 2021, the Organization expended more than $750,000 in Federal awards and did not submit their single audit and related reports to the Federal Audit Clearinghouse by the due date of September 30, 2022. Cause: This was the first year that the Organization was subject to a single audit requirement, and management did not have the proper policies and procedures in place which caused the untimely submission of single audit documents. Effect or Potential Effect: Potential to not be eligible to receive federal assistance in the future. Context: The Organization did not complete and submit their single audit documents by the due date of September 30, 2022. Recommendation : The Organization should implement proper accounting policies and procedures to help facilitate the timely completion of the single audit and submission of related reports. Views of Responsible Official: Management of the Organization concurs with the finding. This was the first year the Organization was subject to a single audit. They have implemented the proper policies and procedures to ensure the audit is completed and documents submitted timely moving forward.