EIN: 311208184
UEI: SEVBPHM2JKF4
Data as of August 23, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 25, 2024. 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 March 25, 2025 (516 days ago).
What is a management decision? →Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.
Show full finding ▾Hide full finding ▴2023–1 Prior Year Audit Entries Not Posted Condition: Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.
The beginning balances of 2023 were not adjusted to the requested 2022 Audit Adjustment Entries received from the Auditor. We will record the adjusted journal entries of 2022 and 2023 in their respective periods
Management failed to capitalize expenditures that yield benefits over an extended period of time. Criteria: Management is required to prepare financial statements in accordance with generally accepted accounting principles. Cause: Transactions were expensed in the accounting records. Effect: Misrepresentation of financial position of the Project. The invoice in the amount of $29,356, which were for repairs under an insurance damage claim, was capitalized during the audit. Recommendation: I recommend management properly capitalize property and equipment according to their capitalization policy.
Show full finding ▾Hide full finding ▴2023-2 Property and Equipment not Capitalized Condition: Management failed to capitalize expenditures that yield benefits over an extended period of time. Criteria: Management is required to prepare financial statements in accordance with generally accepted accounting principles. Cause: Transactions were expensed in the accounting records. Effect: Misrepresentation of financial position of the Project. The invoice in the amount of $29,356, which were for repairs under an insurance damage claim, was capitalized during the audit. Recommendation: I recommend management properly capitalize property and equipment according to their capitalization policy.
Going forward, we will properly capitalize property and equipment according to the capitalization policy.
The owner did not meet the HUD financial reporting requirement. Criteria: According to HUD’s Uniform Financial Reporting Standards rule, annually, an owner is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The unaudited financial statement is due three months after the owner’s fiscal year end and the audited financial statement is due nine months after its fiscal year-end (24 CFR section 5.801). The financial statement must include the financial activities of this program. Cause: The cause is undeterminable. Effect: The Project is not compliant with HUD program requirements. Recommendation: I recommend the owner meet HUD program requirements.
Show full finding ▾Hide full finding ▴2023-3 Late HUD Financial Reporting Condition: The owner did not meet the HUD financial reporting requirement. Criteria: According to HUD’s Uniform Financial Reporting Standards rule, annually, an owner is required to submit a financial statement, prepared in accordance with generally accepted accounting principles (GAAP), in the electronic format specified by HUD. The unaudited financial statement is due three months after the owner’s fiscal year end and the audited financial statement is due nine months after its fiscal year-end (24 CFR section 5.801). The financial statement must include the financial activities of this program. Cause: The cause is undeterminable. Effect: The Project is not compliant with HUD program requirements. Recommendation: I recommend the owner meet HUD program requirements.
We will ensure that going forward, processes are in place to allow for the timely submission of the financial reporting requirements. Further, we request that this finding be removed as the late filing occurred in 2024 and should be given in 2024 pursuant to AU-C 935.
FAC accepted this audit on April 30, 2022 — management decision was due October 30, 2022.
Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.
Show full finding ▾Hide full finding ▴2021?1 Prior Year Audit Entries Not Posted Condition: Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report.
We disagree and request removal of this finding. The auditor entry for prior year 2019 was posted in the year 2019 with a posting date of 12/31/2019 to tie to the 2019 audited financial statements. A copy of our Audit Entry journal entries is attached to support this. Because of these 2019 entries, it made the 2020 adjusting entry for prior year unnecessary, since we were already tied out to the 2020 audited financial statements. Consequently, the finding is invalid
2020-001
Management did not record utility accruals in the accounting records. Criteria: The accrual accounting method ensures transactions are recognized in the accounting period incurred, rather than paid, which follows the matching principle. Cause: The cause is undeterminable. Effect: Not recording accruals could have a material impact on both the balance sheet and the income statements. Recommendation: I recommend management post all accruals to properly reflect the financial position of the Project.
Show full finding ▾Hide full finding ▴2021-2 Accruals Not Properly Posted Condition: Management did not record utility accruals in the accounting records. Criteria: The accrual accounting method ensures transactions are recognized in the accounting period incurred, rather than paid, which follows the matching principle. Cause: The cause is undeterminable. Effect: Not recording accruals could have a material impact on both the balance sheet and the income statements. Recommendation: I recommend management post all accruals to properly reflect the financial position of the Project.
We will ensure that going forward, all required utility accrual entries will be done timely.
The insurance escrow account did not reconcile to the bank statement by $1,198. Criteria: Reconciling cash is fundamental to ensuring actual money spent and received is accounted for. Cause: The cause is undeterminable. Effect: The Project?s cash balance was overstated. Recommendation: I recommend management reconcile bank accounts monthly.
Show full finding ▾Hide full finding ▴2021-3 Insurance Escrow Account Not Reconciled to Bank Statement Condition: The insurance escrow account did not reconcile to the bank statement by $1,198. Criteria: Reconciling cash is fundamental to ensuring actual money spent and received is accounted for. Cause: The cause is undeterminable. Effect: The Project?s cash balance was overstated. Recommendation: I recommend management reconcile bank accounts monthly.
escrow insurance account balance did not agree to the ending statement balance. Response: This is a timing difference. An additional insurance premium of $1,294.75 and a fire insurance credit of <$96.80> for 2021 did not appear until the January 2022 escrow statement. This nets out to $1,197.75 ? the difference sited. The books were already closed for 2021 to prevent further entries, so these amounts were posted with a date of 1/1/2022. Going forward, we will work to ensure that all general ledger entries are posted in the proper period and year.
Casualty gain not recorded in the financial records of the Project. Criteria: When a casualty loss occurs, there are several calculations and journal entries required for proper recording in the financial statements. Cause: I am uncertain as to why the accountant did not record the required casualty loss transactions. Effect: The Project?s statement of financial position as well as the statement of activities was significantly adjusted during the audit. Recommendation: I recommend management ensures that all appropriate accounting transactions are posted.
Show full finding ▾Hide full finding ▴2021-4 Unrecorded Transactions Related to Casualty Loss Condition: Casualty gain not recorded in the financial records of the Project. Criteria: When a casualty loss occurs, there are several calculations and journal entries required for proper recording in the financial statements. Cause: I am uncertain as to why the accountant did not record the required casualty loss transactions. Effect: The Project?s statement of financial position as well as the statement of activities was significantly adjusted during the audit. Recommendation: I recommend management ensures that all appropriate accounting transactions are posted.
There was no corrective action plan provided.
Management failed to collect monthly lease payments resulting in tenants accruing large amounts of past due rent. Criteria: Monthly tenant lease payments should be collected and payable according to the terms of the HUD model lease. Cause: Site managers did not carry out the terms of the HUD-model lease and collect rent due. Effect: Tenant accounts receivables included significant amounts of unpaid rent for current residents. Recommendation: I recommend management develop and implement a collection policy
Show full finding ▾Hide full finding ▴2021-5 Collection of Tenant Accounts Receivable Condition: Management failed to collect monthly lease payments resulting in tenants accruing large amounts of past due rent. Criteria: Monthly tenant lease payments should be collected and payable according to the terms of the HUD model lease. Cause: Site managers did not carry out the terms of the HUD-model lease and collect rent due. Effect: Tenant accounts receivables included significant amounts of unpaid rent for current residents. Recommendation: I recommend management develop and implement a collection policy
This is due to one resident who has failed to pay rent and recertify and refuses to cooperate with management. As a result, subsidy was terminated, and eviction actions have been initiated.The eviction was delayed due to the federal, state, and county moratorium on evictions during 2021. We will continue to follow through with collection and eviction action to remedy all outstanding receivables.
Management failed to provide bids for procured services that exceeded $10,000 or more. Criteria: According to the HUD Management Agent Handbook 4381.5 Section 6.5 Contracting Guidelines when an owner/agent is contracting for goods or services involving project income, an agent is expected to solicit written cost estimates from at least three contractors for any contract, ongoing supply or service which is expected to exceed $10,000 per year. Cause: Management stated that there was an immediate need for a contractor due to flooding in the region. Effect: The Project procured services totaling approximately $300,000 that did not comply with HUD regulations. Recommendation: I recommend management comply with all HUD rules and regulations regarding procurement.
Show full finding ▾Hide full finding ▴2021-6 No Bids Provided Condition: Management failed to provide bids for procured services that exceeded $10,000 or more. Criteria: According to the HUD Management Agent Handbook 4381.5 Section 6.5 Contracting Guidelines when an owner/agent is contracting for goods or services involving project income, an agent is expected to solicit written cost estimates from at least three contractors for any contract, ongoing supply or service which is expected to exceed $10,000 per year. Cause: Management stated that there was an immediate need for a contractor due to flooding in the region. Effect: The Project procured services totaling approximately $300,000 that did not comply with HUD regulations. Recommendation: I recommend management comply with all HUD rules and regulations regarding procurement.
Pursuant to Contracting Guidelines in the Management Agent Handbook - 4381.5 REV-2 Chg-2, Section 6.50 ?When an owner/agent is contracting for goods or services involving project income, an agent is expected to solicit written cost estimates from at least three contractors or suppliers for any contract, ongoing supply or service which is expected to exceed $10,000 per year or the threshold established by the HUD Area Office with jurisdiction over the project.? To the condition, we respond as follows: The property sustained structural damage in 2021 due to a natural disaster and significant emergency repairs were necessary. This natural disaster also impacted the number of suppliers available that could do the work required. The property needed to act quickly to maintain the health and safety of its residents, which is always the priority. More than three bids were solicited for all the emergent needs, but responses from qualified vendors that were also available at that time were extremely limited. Under these emergency circumstances, we went with qualified vendors with available time when we needed them, and the repairs were made to make the property safe and structurally whole.
FAC accepted this audit on April 29, 2021 — management decision was due October 29, 2021.
Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report
Show full finding ▾Hide full finding ▴2020?1 Prior Year Audit Entries Not Posted Condition: Management failed to post prior year audit entries. Criteria: Agreed upon audit adjustments must be posted to the financial statements each year. Cause: The cause is undeterminable. Effect: The financial statement records did not contain all financial transactions of the property. Recommendation: I recommend management post audit entries to agree financial records to audit report
Management agree that the previous accountant fail to post the prior year audit entries. Management?s new accountant has been made aware of this issue and has proceeded to post the prior year entries and will continue to post audit entries going forward.
Management failed to properly record prepaid insurance expenses. Criteria: Management is required to prepare financial statements in accordance with generally accepted accounting principles. Cause: The cause is undeterminable. Effect: Misrepresentation of prepaid expenses could have an impact on both the balance sheet and the income statements. Recommendation: I recommend management properly record prepaid insurance expenses.
Show full finding ▾Hide full finding ▴2020-2 Prepaid Insurance Not Properly Recorded Condition: Management failed to properly record prepaid insurance expenses. Criteria: Management is required to prepare financial statements in accordance with generally accepted accounting principles. Cause: The cause is undeterminable. Effect: Misrepresentation of prepaid expenses could have an impact on both the balance sheet and the income statements. Recommendation: I recommend management properly record prepaid insurance expenses.
Management has reviewed this matter with our accounting team and will ensure that prepaid insurance is recorded properly going forward.
FAC accepted this audit on September 17, 2020 — management decision was due March 17, 2021.
Vacancies are not reconciled throughout the calendar year. Criteria: Vacancies should be reconciled at the end of each month. Cause: The cause is undeterminable. Effect: Vacancies had to be reconciled during the audit process. Recommendation: I recommend management reconcile vacancies on a monthly basis.
Show full finding ▾Hide full finding ▴2019?1 Vacancies Not Reconciled Timely Condition: Vacancies are not reconciled throughout the calendar year. Criteria: Vacancies should be reconciled at the end of each month. Cause: The cause is undeterminable. Effect: Vacancies had to be reconciled during the audit process. Recommendation: I recommend management reconcile vacancies on a monthly basis.
Response: All vacancies in the General Ledger of ARMS agree to the reports of the tenant ledgers in our Leasing and Rents software. This reconciliation of vacancies is performed on a regular basis.
Gross potential rent is not reconciled throughout the calendar year. Criteria: Gross potential rent should be reconciled at the end of each month. Cause: The cause is undeterminable. Effect: Gross potential rent had to be calculated and reconciled during the audit process. Recommendation: I recommend management calculate and reconcile on gross potential rent on a monthly basis.
Show full finding ▾Hide full finding ▴2019?2 Gross Potential Rent Not Reconciled Timely Condition: Gross potential rent is not reconciled throughout the calendar year. Criteria: Gross potential rent should be reconciled at the end of each month. Cause: The cause is undeterminable. Effect: Gross potential rent had to be calculated and reconciled during the audit process. Recommendation: I recommend management calculate and reconcile on gross potential rent on a monthly basis.
Response: The gross rent potential is reconciled throughout the year. However, interim and annual certifications of resident income, assets, and household composition may create adjustments to prior periods of rent and subsidy payments. We will continue to ensure reconciliation of Gross Rent Potential on a monthly basis.
Management failed to collect monthly lease payments resulting in tenants accruing large amounts of past due rent. Criteria: Monthly tenant lease payments should be collected and payable according to the terms of the HUD model lease. Cause: Site managers did not carry out the terms of the HUD-model lease and collect rent due. Effect: Tenant accounts receivables included significant amounts of unpaid rent for former residents. Recommendation: I recommend management develop and implement a collection policy.
Show full finding ▾Hide full finding ▴2019?3 Collection of Tenant Accounts Receivable Condition: Management failed to collect monthly lease payments resulting in tenants accruing large amounts of past due rent. Criteria: Monthly tenant lease payments should be collected and payable according to the terms of the HUD model lease. Cause: Site managers did not carry out the terms of the HUD-model lease and collect rent due. Effect: Tenant accounts receivables included significant amounts of unpaid rent for former residents. Recommendation: I recommend management develop and implement a collection policy.
Response: We will ensure, going forward, that our collection policy relating to former residents is adhered to.
Management Agent Certifications provided during the audit and approved by the Department of Housing and Urban Development (HUD) had a term of 3/18/2018 ? 2/28/2019. Criteria: According to HUD Handbook 4381.5, The Management Handbook, Paragraph 2.6, the owner and agent must complete HUD Form 9839-B Management Agent Certification. Cause: Management failed to obtain a current management agent certification approved by HUD. Effect: The accuracy of the management fee expense is undeterminable. Recommendation: I recommend the management company obtain current management agent certifications approved by HUD, upon expiration.
Show full finding ▾Hide full finding ▴2019?4 Management Agent Certifications Not Current Condition: Management Agent Certifications provided during the audit and approved by the Department of Housing and Urban Development (HUD) had a term of 3/18/2018 ? 2/28/2019. Criteria: According to HUD Handbook 4381.5, The Management Handbook, Paragraph 2.6, the owner and agent must complete HUD Form 9839-B Management Agent Certification. Cause: Management failed to obtain a current management agent certification approved by HUD. Effect: The accuracy of the management fee expense is undeterminable. Recommendation: I recommend the management company obtain current management agent certifications approved by HUD, upon expiration.
Response: The Management Agent Certification (HUD Form 9839-b) does not have an expiration date. An updated Management Agent Certification (HUD Form 9839-b) is required under the following conditions: a) Authorizing the agent to collect a fee different from the percentages fees and any special fees specified in Paragraph 1 of the existing Certification: b) Changing the expiration date of the Management Agreement. c) Renewing the Management Agreement. d) Permitting a new Agent to operate the project e) Permitting a new Agent to collect a fee. f) Undertaking self-management of the project. Therefore, we disagree with this finding as the Management Agent Certification provided that is signed and approved by the Owner, HUD, and the Agent, is valid.
Documentation was not provided to support the timely refund of the security deposit for one tenant tested. Criteria: According to the Consolidated Audit Guide for Audits of HUD Program Handbook 2000.04 REV-2 Change 1, Chapter 3, tenant security deposits must be refunded within 30 days of move-out. Cause: Unable to determine. Effect: The Project is not in compliance with the Consolidated Audit Guide for Audits of HUD Program as it relates to tenant security deposits. Recommendation: I recommend management provide supporting documentation requested for security deposit refunds to ensure compliance with Consolidated Audit Guide for Audits of HUD Program.
Show full finding ▾Hide full finding ▴Condition: Documentation was not provided to support the timely refund of the security deposit for one tenant tested. Criteria: According to the Consolidated Audit Guide for Audits of HUD Program Handbook 2000.04 REV-2 Change 1, Chapter 3, tenant security deposits must be refunded within 30 days of move-out. Cause: Unable to determine. Effect: The Project is not in compliance with the Consolidated Audit Guide for Audits of HUD Program as it relates to tenant security deposits. Recommendation: I recommend management provide supporting documentation requested for security deposit refunds to ensure compliance with Consolidated Audit Guide for Audits of HUD Program.
Response: The date of the move out was 07/17/2019, the security deposit refund was issued on 08/06/2019. The canceled check have been uploaded to the share drive for your review and consideration.
The reserve for replacement account was underfunded by $384. Criteria: According to the HUD Consolidated Audit Guide 2000-4, owners are required to make monthly deposits as prescribed by HUD Form 9250. Cause: Management failed to make the appropriate deposits into the reserve for replacement account. Effect: The Project is not in compliance with HUD guidelines. Recommendation: I recommend management properly fund the reserve for replacement account according to HUD guidelines.
Show full finding ▾Hide full finding ▴2019?6 ? Reserve for Replacement Account Underfunded Condition: The reserve for replacement account was underfunded by $384. Criteria: According to the HUD Consolidated Audit Guide 2000-4, owners are required to make monthly deposits as prescribed by HUD Form 9250. Cause: Management failed to make the appropriate deposits into the reserve for replacement account. Effect: The Project is not in compliance with HUD guidelines. Recommendation: I recommend management properly fund the reserve for replacement account according to HUD guidelines.
Response: All of the monthly reserve for replacement amounts reflected in the mortgage statements of Orix Mortgage have been timely paid in the amount of $1639.00 per month for the 12 months in 2019. Therefore, we disagree that this account is underfunded in fiscal year ending 2019.
FAC accepted this audit on March 25, 2019 — management decision was due September 25, 2019.
GSA_MIGRATION
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Show full finding ▾Hide full finding ▴FAC accepted this audit on September 6, 2018 — management decision was due March 6, 2019.
GSA_MIGRATION
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