EIN: 223232914
UEI: WMSWDFR9QSN5
Single Audit filed under EIN: 042777145
That audit also covers EIN: 042400270 · unlinked EINs have no separate FAC filing
Audited by: CohnReznick LLP
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on January 22, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by July 22, 2025 (409 days ago).
What is a management decision? →Finding 2021-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2021, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $30,803 of which $18,674 remians outstanding. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $18,674 Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-002). Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted
Show full finding ▾Hide full finding ▴Finding 2021-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2021, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $30,803 of which $18,674 remians outstanding. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $18,674 Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-002). Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted
2021-002 - Allowable Costs/Cost Principles - Material Weakness Recommendation: We recommend that HES develop and implement procedures and controls to ensure management fee payment amounts are in accordance with the management agreement, and we recommend that funds be immediately returned to HES from the management agent. Action Taken: This finding resulted from a single mischaracterized sponsor contribution, followed by the subsequent departure of competent accounting staff who could have corrected the issue. Corrective action was taken beginning in fiscal year 2022 when this issue was identified by competent accounting staff during which intercompany balances were reconciled and have been balanced routinely in subsequent fiscal years. The sponsor and management agent are in the process of developing a repayment plan.
2020-002
Finding 2021-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-003). Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2021-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-003). Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2021-003 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain fidelity bond coverage as required by HUD regulations. Action Taken: The Management Agent is not responsible, nor able to obtain fidelity coverage for this property. This is the responsibility of the Sponsor. The Management agent will follow up with the sponsor to receive and report documentation when the appropriate coverage is in place.
2020-003
Finding 2021-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2021 was not timely submitted to HUD via the Real Estate Assessment Center REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-004). Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2021-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2021 was not timely submitted to HUD via the Real Estate Assessment Center REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-004). Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2021-004 - Reporting - Material Weakness Recommendation: Financial statements should be timely filed to REAC. Action Taken: Historically, REAC submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
2020-004
Finding 2021-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior finding number 2020-005). Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2021-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior finding number 2020-005). Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2021-005 - Reporting - Material Weakness Recommendation: Management should ensure timely completion of a Uniform Guidance audit, as required. Action Taken: Historically, Uniform Guidance Data Collection Form submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
2020-005
Finding 2021-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-006). Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2021-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2020-006). Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2021-006 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Action Taken: Although it was believed that a HUD approved AFHMP was in place, documentation of this plan couldnot be located by all parties. The Managing Agent will take steps to obtain a new HUD approved AFHMP and include the equal opportunity logo to marketing materials.
2020-006
Finding 2021-007 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve. Condition During the year ended September 30, 2021, the project did not make the required monthly deposits to the replacement reserve in the amount of $6,563. The project is required to make monthly deposits to the reserve in the amount of $1,313. Cause Management did not have internal controls in place to ensure required deposits were made to the replacement reserve. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding the replacement resere and a violation of the regulatory agreement. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should review the project budget to determine if nonessential costs can be cut or request a loan from the sponsor to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations will be adopted
Show full finding ▾Hide full finding ▴Finding 2021-007 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve. Condition During the year ended September 30, 2021, the project did not make the required monthly deposits to the replacement reserve in the amount of $6,563. The project is required to make monthly deposits to the reserve in the amount of $1,313. Cause Management did not have internal controls in place to ensure required deposits were made to the replacement reserve. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding the replacement resere and a violation of the regulatory agreement. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should review the project budget to determine if nonessential costs can be cut or request a loan from the sponsor to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations will be adopted
2021-007 - Special Tests and Provisions - Material Weakness Recommendation: Management should review the project budget to determine if nonessential costs can be cut or request a loan from the sponsor to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Action Taken: The Managing Agent undertook an agency wide cost reduction beginning in March 2024, reducing project indirect costs by approximately 10-15%. Project direct costs cannot be reduced much further with most required services already being provided by city departments, and designated utility providers. The project has not had a budget increase since 2013, and while the project has a healthy replacement reserve balance in excess of $135k the project operating budget deficit is currently unable to fund those reserves without jeopardizing essential health and safety services. Management has sought and received multiple sponsor loans to address these shortfalls. The Management agent is presently prepared to submit for a required budget increase immediately following completion of all outstanding audits as required to secure the necessary rent increase.
Finding 2021-008 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing programs. Condition In connection with our lease file review we noted one out of two tenants tested did not have documentation in their lease file that their income was verified. Cause Management did not have internal controls in place to ensure tenant income was verified. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that the tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R – Section 8 program administration Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations will be adopted.
Show full finding ▾Hide full finding ▴Finding 2021-008 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing programs. Condition In connection with our lease file review we noted one out of two tenants tested did not have documentation in their lease file that their income was verified. Cause Management did not have internal controls in place to ensure tenant income was verified. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that the tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R – Section 8 program administration Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations will be adopted.
2021-008- Special Tests and Provisions - Material Weakness Recommendation: Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that the tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Action Taken: Management will establish procedures to ensure that tenant eligibility is correctly determined and that all the tenant lease files are properly maintained in accordance with the requirements of HUD handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs.
FAC accepted this audit on January 22, 2025 — management decision was due July 22, 2025.
Finding 2020-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2020, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $30,803 of which $29,480 is related to prior year. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $30,803 Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-002). Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2020-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2020, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $30,803 of which $29,480 is related to prior year. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $30,803 Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-002). Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2020-002 - Allowable Costs/Cost Principles - Material Weakness Recommendation: We recommend that HES develop and implement procedures and controls to ensure management fee payment amounts are in accordance with the management agreement, and we recommend that funds be immediately returned to HES from the management agent. Action Taken: This finding resulted from a single mischaracterized sponsor contribution, followed by the subsequent departure of competent accounting staff who could have corrected the issue. Corrective action was taken beginning in fiscal year 2022 when this issue was identified by competent accounting staff during which intercompany balances were reconciled and have been balanced routinely in subsequent fiscal years. The management agent has already taken steps and has repaid the amount in question, with final resolution pending the completion of the audit(s) in question.
2019-002
Finding 2020-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding ( see prior year finding number 2019-003). Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2020-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding ( see prior year finding number 2019-003). Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2020-003 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain fidelity bond coverage as required by HUD regulations. Action Taken: The Management Agent is not responsible, nor able to obtain fidelity coverage for this property. This is the responsibility of the Sponsor. The Management agent will follow up with the sponsor to receive and report documentation when the appropriate coverage is in place.
2019-003
Finding 2020-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2019 was not timely submitted to HUD via the Real Estate Assessment Center REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-004). Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2020-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2019 was not timely submitted to HUD via the Real Estate Assessment Center REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-004). Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2020-004 - Reporting - Material Weakness Recommendation: Financial statements should be timely filed to REAC. Action Taken: Historically, REAC submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
2019-004
Finding 2020-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-005). Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2020-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-005). Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2020-005 - Reporting - Material Weakness Recommendation: Management should ensure timely completion of a Uniform Guidance audit, as required. Action Taken: Historically, Uniform Guidance Data Collection Form submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
2019-005
Finding 2020-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-006). Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2020-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2019-006). Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2020-006 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Action Taken: Although it was believed that a HUD approved AFHMP was in place, documentation of this plan couldnot be located by all parties. The Managing Agent will take steps to obtain a new HUD approved AFHMP and include the equal opportunity logo to marketing materials.
2019-006
FAC accepted this audit on January 22, 2025 — management decision was due July 22, 2025.
Finding 2019-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2019, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $29,480. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $29,480 Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that HES develop and implement internal controls to ensure management fee payments are in accordance with the management agreement, and that funds be returned to HES. Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2019-002 – Allowable Costs/Cost Principles – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2019, HES paid the management agent for costs in excess of amounts incurred by the management agent totaling $29,480. Cause Internal controls were not in place to ensure that payments to the management agent were allowable costs. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $29,480 Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that HES develop and implement internal controls to ensure management fee payments are in accordance with the management agreement, and that funds be returned to HES. Auditor Noncompliance Code: J – Unauthorized management fees Finding Resolution Status: Unresolved Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2019-002 - Allowable Costs/Cost Principles - Material Weakness Recommendation: We recommend that HES develop and implement procedures and controls to ensure management fee payment amounts are in accordance with the management agreement, and we recommend that funds be immediately returned to HES from the management agent. Action Taken: This finding resulted from a single mischaracterized sponsor contribution, followed by the subsequent departure of competent accounting staff who could have corrected the issue. Corrective action was taken beginning in fiscal year 2022 when this issue was identified by competent accounting staff during which intercompany balances were reconciled and have been balanced routinely in subsequent fiscal years. The management agent has already taken steps and has repaid the amount in question, with final resolution pending the completion of the audit(s) in question.
Finding 2019-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2019-003 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD regulations at HUD Handbook 4381.5, the Management Agent, require HES's management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months’ gross potential rent. If the policy covers more than one project, this minimum must be computed using HES with the highest gross potential rent. Condition Management did not maintain fidelity bond coverage as required by HUD regulations. Cause Internal controls were not in place to fidelity bond coverage was in place. Effect or Potential Effect Management did not maintain fidelity bond coverage in violation of HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should obtain fidelity bond coverage as required by HUD regulations immediately. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2019-003 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain fidelity bond coverage as required by HUD regulations. Action Taken: The Management Agent is not responsible, nor able to obtain fidelity coverage for this property. This is the responsibility of the Sponsor. The Management agent will follow up with the sponsor to receive and report documentation when the appropriate coverage is in place.
Finding 2019-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2019 was not timely submitted to HUD via the REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2019-004 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria HUD under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H, requires not-for-profit multifamily program participants to submit financial statement data electronically to Real Estate Assessment Center ("REAC") within 90 days after their fiscal year-end. If the owner is not prepared to submit the audited financial information, then an owner-certified report must be submitted within 90 days of fiscal year-end. Condition The audited annual financial statement data for the year ended September 30, 2019 was not timely submitted to HUD via the REAC system. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to REAC. Effect or Potential Effect The audited annual financial statement data was not filed timely to REAC. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Financial statements should be timely filed. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2019-004 - Reporting - Material Weakness Recommendation: Financial statements should be timely filed to REAC. Action Taken: Historically, REAC submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
Finding 2019-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2019-005 – Reporting – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria The OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"), which requires institutions of higher education and nonprofit institutions that expend $750,000 or more in federal funds to annually conduct a detailed, organization-wide audit that complies with the established criteria. Additionally, the Uniform Guidance reporting package and the data collection form are required to be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 days after the receipt of the auditors reports or nine months after the end of the audit period, unless a longer period of time was agreed to in advance by the cognizant or oversight agency for the audit. Condition A detailed, organization-wide audit that complies with Uniform Guidance established criteria was not timely completed and submitted to the FAC. Cause Management did not have internal controls in place to allow for a timely audit which resulted in delays in timely submitting the report to FAC. Effect or Potential Effect A detailed, organization-wide audit that complies with the established criteria was not timely completed resulting in HES not being in compliance with Uniform Guidance requirements. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should ensure timely completion of a Uniform Guidance audit, as required. Auditor Noncompliance Code: S - Internal control deficiency Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2019-005 - Reporting - Material Weakness Recommendation: Management should ensure timely completion of a Uniform Guidance audit, as required. Action Taken: Historically, Uniform Guidance Data Collection Form submissions were scheduled by the sponsor. In April 2019, the management agent experienced significant staff turnover including the Chief Financial Officer. The Entity's fiscal year fiscal year 2019 closed shortly thereafter. Management Agent Staff were unaware the required fiscal year 2019 and subsequent audit(s) had not been scheduled by the Sponsor; Covid 19 hit shortly thereafter. This issue went unaddressed throughout the pandemic, followed by the resignation of the Management Agent Accounting Manager in 2021, a position that remained vacant for nearly a year. The Management agent engaged with a CPA firm to conduct the 2019, 2020 and 2021 audits.
Finding 2019-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
Show full finding ▾Hide full finding ▴Finding 2019-006 – Special Tests and Provisions – Material Weakness Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181 Federal Award Identification Number and Year: N/A and 1997 Name of Pass-through Entity: N/A Criteria In accordance with 24 CFR Part 200 Subpart M section 200.625 requires program participants to provide an Affirmative Fair Housing Marketing Plan (“AFHMP”) approved by HUD. In addition, HUD’s equal housing opportunity logo is required to be displayed on marketing materials. Condition HES was unable to produce an approved AFHMP and did not display the HUD-approved equal housing opportunity logo on marketing materials. Cause Management did not have internal controls in place to ensure an AFHMP was in place and the equal opportunity logo was displayed in accordance with HUD requirements. Effect or Potential Effect HES is not in compliance with HUD regulations. Questioned Costs None. Context See the context of the finding detailed in the condition section above. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Auditor Noncompliance Code: Z- Other Finding Resolution Status: Unresolved. Views of Responsible Officials HES agrees with the finding and the auditor's recommendations have been adopted.
2019-006 - Special Tests and Provisions - Material Weakness Recommendation: Management should obtain a HUD approved AFHMP and add the equal opportunity logo to marketing materials. Action Taken: Although it was believed that a HUD approved AFHMP was in place, documentation of this plan could not be located by all parties. The Managing Agent will take steps to obtain a new HUD approved AFHMP and include the equal opportunity logo to marketing materials.
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