EIN: 341523396
UEI: E31TLJN3BAQ8
Audited by: Clark, Schaefer, Hackett & Co
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 11, 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 June 11, 2025 (445 days ago).
What is a management decision? →During 2023, the management company used operating and mortgage escrow funds in the amount of $283,467 for purposes unrelated to the Project. The management company returned $130,000 to the operating cash account during the year. Remaining $144,135 is included in accounts receivable, other and $9,332 is included in prepaid expenses as of December 31, 2023. Questioned Costs: $283,467 Cause: Management company’s oversight of Project funds did not ensure compliance with requirements related to the use of Project funds. Effect: The unauthorized use of Project funds by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement regarding use of project funds. Recommendation: Management should enhance its internal controls to ensure Project funds are only used for Project activities and expenses necessary for the ongoing operation and maintenance of the Project.
Show full finding ▾Hide full finding ▴Criteria: Project funds must be used for the operation of the project, including required insurance coverage, and to make required deposits to replacement reserve and residual receipts accounts (24 CFR section 891.400(e)). Condition: During 2023, the management company used operating and mortgage escrow funds in the amount of $283,467 for purposes unrelated to the Project. The management company returned $130,000 to the operating cash account during the year. Remaining $144,135 is included in accounts receivable, other and $9,332 is included in prepaid expenses as of December 31, 2023. Questioned Costs: $283,467 Cause: Management company’s oversight of Project funds did not ensure compliance with requirements related to the use of Project funds. Effect: The unauthorized use of Project funds by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement regarding use of project funds. Recommendation: Management should enhance its internal controls to ensure Project funds are only used for Project activities and expenses necessary for the ongoing operation and maintenance of the Project.
Comments on Findings and Recommendations: Management concurs with the findings and auditors’ recommendations to enhance internal controls to ensure compliance with the HUD Regulatory Agreement. Action(s) Taken or Planned for amounts due back to the Project: The management company previously advised HUD that it is in the process of marketing and selling its affordable property portfolio. The management company has reached an agreement in principle with a buyer for the sale of a significant portion of its affordable property portfolio. The buyer has significant experience in the affordable housing industry and is well-positioned to own and manage these properties. The parties are in the process of drafting all necessary documents and will work with HUD on all necessary documentation and approvals promptly once the underlying documents are fully negotiated. The management company is confident that there will be sufficient funds at the conclusion of the collective transactions with the buyer for the (re)payment of amounts to address the Findings identified herein. The management company anticipates closings by the end of 2024.
During 2023, the management company without approval from HUD withdrew $186,005 from the replacement reserve account. Funds were used by the management company for purposes unrelated to the Project. Remaining $186,005 is included in accounts receivable, other. Questioned Costs: $186,005 Cause: Management company failed to comply with the replacement reserve disbursement requirement. Effect: The unauthorized withdrawal of funds from the replacement reserve account by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement. Recommendation: Management should enhance its internal controls to ensure management company’s compliance with replacement reserve account.
Show full finding ▾Hide full finding ▴Criteria: All disbursements from the replacement reserve account must be approved by HUD (24 CFR section 891.405). Condition: During 2023, the management company without approval from HUD withdrew $186,005 from the replacement reserve account. Funds were used by the management company for purposes unrelated to the Project. Remaining $186,005 is included in accounts receivable, other. Questioned Costs: $186,005 Cause: Management company failed to comply with the replacement reserve disbursement requirement. Effect: The unauthorized withdrawal of funds from the replacement reserve account by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement. Recommendation: Management should enhance its internal controls to ensure management company’s compliance with replacement reserve account.
Comments on Findings and Recommendations: Management concurs with the findings and auditors’ recommendations to enhance internal controls to ensure compliance with the HUD Regulatory Agreement. Action(s) Taken or Planned for amounts due back to the Project: The management company previously advised HUD that it is in the process of marketing and selling its affordable property portfolio. The management company has reached an agreement in principle with a buyer for the sale of a significant portion of its affordable property portfolio. The buyer has significant experience in the affordable housing industry and is well-positioned to own and manage these properties. The parties are in the process of drafting all necessary documents and will work with HUD on all necessary documentation and approvals promptly once the underlying documents are fully negotiated. The management company is confident that there will be sufficient funds at the conclusion of the collective transactions with the buyer for the (re)payment of amounts to address the Findings identified herein. The management company anticipates closings by the end of 2024.
During 2023, the management company without approval from HUD withdrew $474,005 from the residual receipts account. Funds were used by the management company for purposes unrelated to the Project. Remaining $474,005 is included in accounts receivable, other. Questioned Costs: $474,005 Cause: Management company failed to comply with the residual receipts disbursement requirement. Effect: The unauthorized withdrawal of funds from the residual receipts account by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement. Recommendation: Management should enhance its internal controls to ensure management company’s compliance with residual receipts account.
Show full finding ▾Hide full finding ▴Criteria: All disbursements from the residual receipts account must be approved by HUD (24 CFR section 891.400(e)). Condition: During 2023, the management company without approval from HUD withdrew $474,005 from the residual receipts account. Funds were used by the management company for purposes unrelated to the Project. Remaining $474,005 is included in accounts receivable, other. Questioned Costs: $474,005 Cause: Management company failed to comply with the residual receipts disbursement requirement. Effect: The unauthorized withdrawal of funds from the residual receipts account by the management company resulted in the Project not to be in full compliance with its Regulatory Agreement. Recommendation: Management should enhance its internal controls to ensure management company’s compliance with residual receipts account.
Comments on Findings and Recommendations: Management concurs with the findings and auditors’ recommendations to enhance internal controls to ensure compliance with the HUD Regulatory Agreement. Action(s) Taken or Planned for amounts due back to the Project: The management company previously advised HUD that it is in the process of marketing and selling its affordable property portfolio. The management company has reached an agreement in principle with a buyer for the sale of a significant portion of its affordable property portfolio. The buyer has significant experience in the affordable housing industry and is well-positioned to own and manage these properties. The parties are in the process of drafting all necessary documents and will work with HUD on all necessary documentation and approvals promptly once the underlying documents are fully negotiated. The management company is confident that there will be sufficient funds at the conclusion of the collective transactions with the buyer for the (re)payment of amounts to address the Findings identified herein. The management company anticipates closings by the end of 2024.
FAC accepted this audit on April 19, 2023 — management decision was due October 19, 2023.
FAC accepted this audit on September 6, 2022 — management decision was due March 6, 2023.
FAC accepted this audit on August 12, 2021 — management decision was due February 12, 2022.
FAC accepted this audit on April 1, 2020 — management decision was due October 1, 2020.
FAC accepted this audit on September 29, 2019 — management decision was due March 29, 2020.
FAC accepted this audit on June 3, 2018 — management decision was due December 3, 2018.
FAC accepted this audit on May 1, 2017 — management decision was due November 1, 2017.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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