Nutley Senior Citizens Housing CorporationNon-Profit

Finding 2025-001 Significant Deficiency Submission of surplus cash to the residual receipt account Criteria: In accordance with HUD Multifamily programs and the Projects HUD Regulatory Agreement under Section 207 the Project is required to submit any surplus cash within sixty-days of year end. Conditiion: During our audit, we identified that the Project did not deposit its surplus cash within the required deadline for the years 2025 and 2024. This resulted in non-compliance with the established financial controls and reporting requirements. The delay in deposit could have impacted the Project's compliance with Major Federal Award Programs. Cause: The Project's internal control procedures did not ensure that surplus cash deposits were made within the required timeframe. Effect: The Project is in noncompliance with the specific requirements of its HUD Regulatory Agreement. Identification of Repeat Finding: 2024-001 Recommendation: Management should implement stronger internal controls to ensure surplus cash deposits are made in accordance with the required deadlines. This may include setting up automated reminders, improving oversight, or assigning clear responsibilities to ensure compliance. Views of Responsible Officials and Planned Corrective Actions: Management has reviewed the audit finding and acknowledges the delay in depositing surplus cash. Management has submitted a request to HUD to retain the surplus cash for future capital improvements to the property.

Finding 2024-001 Significant Deficiency Internal Control over Major Federal Award Programs Criteria: Accounting principles generally accepted in the United States of America ("GAAP"), as prescribed by the Governmental Accounting Standards Board, require entities to establish and maintain effective internal control over financial reporting to prepare timely, accurate financial reports. Condition: During our audit, we identified that the Project did not deposit its surplus cash within the required deadline. This resulted in noncompliance with the established financial controls and reporting requirements. The delay in deposit could have impacted the Project's compliance with Major Federal Award Programs. Cause: The Project's internal control procedures did not ensure that surplus cash deposits were made within the required timeframe. This indicates a deficiency in the financial closing process related to Major Federal Award Programs. Effect: As a result of this condition, the Project was not in compliance with the required financial reporting timeline. The delay in deposit could lead to noncompliance with Major Federal Award Programs. Recommendation: Management should implement stronger internal controls to ensure surplus cash deposits are made in accordance with the required deadlines. This may include setting up automated reminders, improving oversight, or assigning clear responsibilities to ensure compliance. Views of Responsible Officials and Planned Corrective Actions: Management has reviewed the audit finding and acknowledges the delay in depositing surplus cash. Management was under the impression that the surplus cash was going to be used for the reduction of a future HAP payment. Management believes this was an isolated incident and has taken corrective action by reinforcing internal procedures to ensure timely deposits in the future. Additional monitoring measures have been implemented to prevent recurrence.

Section III - Federal Award Findings and Questioned Costs Finding 2020-002 - Significant Deficiency Procurement Policy Criteria: The Uniform Guidance ?200.318 states that the Organization must:- Use its own documented procurement procedures which reflect applicable state, local and tribal laws and regulations, provided that the procurements conform to the applicable federal law and the standards identified in this section.- Maintain records sufficient to detail the history of procurement. The records must include the rationale for the method procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policy, thus does not adhere to the provisions for procurement in accordance with the Uniform Guidance. Cause: The Organization's procurement policy is not in compliance with the Uniform Guidance procurement requirements. Effect: Failure to have procurement policies that are in compliance with the Uniform Guidance procurement requirements could result in procurements not being conducted in a manner to provide a full and open competition. Recommendation: Ensure that the Organization's procurement policy complies with the Uniform Guidance and that the procurement policy is followed, and that proper procurement documentation maintained. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. Management will update the procurement policy to ensure it adheres to the provisions for procurement in accordance with the Uniform Guidance.

Section III - Federal Award Findings and Questioned Costs Finding 2019-002 - Significant Deficiency Procurement Policy Criteria: "The Uniform Guidance ?200.318 states that the Organization must: - Use its own documented procurement procedures which reflect applicable state, local and tribal laws and regulations, provided that the procurements conform to the applicable federal law and the standards identified in this section. - Maintain records sufficient to detail the history of procurement. The records must include the rationale for the method procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." Condition: The Organization does not have written procurement policy, thus does not adhere to the provisions for procurement in accordance with the Uniform Guidance. Cause: The Organization's procurement policy is not in compliance with the Uniform Guidance procurement requirements. Effect: Failure to have procurement policies that are in compliance with the Uniform Guidance procurement requirements could result in procurements not being conducted in a manner to provide a full and open competition. Recommendation: Ensure that the Organization's procurement policy complies with the Uniform Guidance and that the procurement policy is followed, and that proper procurement documentation maintained. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. Management will update the procurement policy to ensure it adheres to the provisions for procurement in accordance with the Uniform Guidance.