EIN: 521848824
UEI: GSA_MIGRATION
Audited by: LOCHTE & COMPANY PA
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of September 7, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 29, 2020. 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 29, 2021 (1990 days ago).
What is a management decision? →The Organization?s accounting records were not adequately maintained. Specifically, bank reconciliations were performed tardily for November 2018 through June 30, 2019, related party operating cost reimbursements did not agree to billed amounts and time sheets, the year- end general ledger operating cash and tenant receivables were not reconciled, and some general journal entries were not supported by detailed backup. Criteria: The organization?s policies were not adhered by staff. Cause: The organization experienced significant staff turnover in the accounting department with the Accounting Manager and the Staff Accountant leaving during the fiscal year which resulted in vacant positions and existing staff having greater responsibilities. Effect: Because accounting records were not adequately maintained, the organization was more susceptible to errors or frauds not being identified in a timely manner. Recommendation: We recommend that the organization increase management oversight of new staff and provide all accounting staff with the established accounting policies and procedures to be followed as part of their required duties. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor?s recommendation and are still in the process of filling the vacant positions and training newly hired staff. Material Weakness. The organization did not maintain its accounting records in accordance with HUD regulations which could result in errors or frauds not being identified in a timely manner. The organization?s policies and procedures should be adhered, and new staff should receive training and greater supervision.
Show full finding ▾Hide full finding ▴2019-002 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Condition: The Organization?s accounting records were not adequately maintained. Specifically, bank reconciliations were performed tardily for November 2018 through June 30, 2019, related party operating cost reimbursements did not agree to billed amounts and time sheets, the year- end general ledger operating cash and tenant receivables were not reconciled, and some general journal entries were not supported by detailed backup. Criteria: The organization?s policies were not adhered by staff. Cause: The organization experienced significant staff turnover in the accounting department with the Accounting Manager and the Staff Accountant leaving during the fiscal year which resulted in vacant positions and existing staff having greater responsibilities. Effect: Because accounting records were not adequately maintained, the organization was more susceptible to errors or frauds not being identified in a timely manner. Recommendation: We recommend that the organization increase management oversight of new staff and provide all accounting staff with the established accounting policies and procedures to be followed as part of their required duties. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor?s recommendation and are still in the process of filling the vacant positions and training newly hired staff. Material Weakness. The organization did not maintain its accounting records in accordance with HUD regulations which could result in errors or frauds not being identified in a timely manner. The organization?s policies and procedures should be adhered, and new staff should receive training and greater supervision.
Finding No. 2019-002 ? Section 811 Project, CFDA #14.181 Accounting Records Were Not Adequately Maintained Recommendation: We recommend that the organization increase management oversight of new staff and provide all accounting staff with the established accounting policies and procedures to be followed as part of their required duties. Action Taken: We concur with the recommendation and are still in the process of implementing training for newly hired staff.
The project did not maintain tenant files in accordance with HUD regulations regarding tenant rents and tenant files. Criteria: 3 of 16 tenants billed did not agree to amounts reported to HUD. 1 of 3 tenant files reviewed revealed that documentation of the tenant?s income was missing; 3 of 3 tenant files reviewed did not contain an annual unit inspection report; and 2 of 3 tenant files reviewed did not contain a signed housing application signed by the tenant and the organization. Cause: The organization experienced staff turnover which led to policies and procedures not being adhered and files maintained in accordance with HUD regulations. Effect: The Project is in violation of its regulatory agreement with HUD and some tenants were overbilled. Context: A sample of three tenant files was selected for audit out of a total population of 13 tenant files during the audit period. 16 attributes were tested in which the exceptions were identified. Our sample was a statistically valid sample. In addition we reviewed the tenant rent rolls, the housing assistance payment requests to HUD and the tenant accounts receivable reports. Recommendation: We recommend that the organization review and correct the tenants who were overbilled, increase training to new team members, and distribute the policies and procedures to new staff to ensure that tenant files are maintained in accordance with HUD regulations. In addition we recommend that rent rolls be matched to housing assistance payment requests on a monthly basis and any adjustments be promptly investigated. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor?s recommendations.
Show full finding ▾Hide full finding ▴2019-003 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Statement of Condition: The project did not maintain tenant files in accordance with HUD regulations regarding tenant rents and tenant files. Criteria: 3 of 16 tenants billed did not agree to amounts reported to HUD. 1 of 3 tenant files reviewed revealed that documentation of the tenant?s income was missing; 3 of 3 tenant files reviewed did not contain an annual unit inspection report; and 2 of 3 tenant files reviewed did not contain a signed housing application signed by the tenant and the organization. Cause: The organization experienced staff turnover which led to policies and procedures not being adhered and files maintained in accordance with HUD regulations. Effect: The Project is in violation of its regulatory agreement with HUD and some tenants were overbilled. Context: A sample of three tenant files was selected for audit out of a total population of 13 tenant files during the audit period. 16 attributes were tested in which the exceptions were identified. Our sample was a statistically valid sample. In addition we reviewed the tenant rent rolls, the housing assistance payment requests to HUD and the tenant accounts receivable reports. Recommendation: We recommend that the organization review and correct the tenants who were overbilled, increase training to new team members, and distribute the policies and procedures to new staff to ensure that tenant files are maintained in accordance with HUD regulations. In addition we recommend that rent rolls be matched to housing assistance payment requests on a monthly basis and any adjustments be promptly investigated. Views of Responsible Officials and Planned Corrective Actions: We agree with the auditor?s recommendations.
Finding No. 2019-003 ? Section 811 Project, CFDA #14.181 Recommendation: We recommend that the organization review and correct the tenants who were overbilled, increase training to new team members, and distribute the policies and procedures to new staff to ensure that tenant files are maintained in accordance with HUD regulations. In addition we recommend that rent rolls be matched to housing assistance payment requests on a monthly basis and any adjustments be promptly investigated. Action Taken: We concur with the recommendation and are still in the process of implementing training for newly hired staff.
The Project was unable to provide documentation supporting one of four withdrawals from the reserve for replacement account. Criteria: HUD requires Section 811 Projects to have HUD approval documented before withdrawing funds from the reserve for replacement account. Cause: The organization had staff turnover which led to accounting records being misplaced and existing staff unable to locate documents. Effect: The Project was not in compliance with Section 811 project requirements. Context: HUD regulations have specific guidelines for the withdrawal of funds from the reserve for replacement account. The Project did not adhere to the HUD guidelines. Recommendation: The Project should ensure that HUD authorizations are received before withdrawing funds from the reserve for replacement account and should file the HUD approvals in a designated file. Views of Responsible Officials and Planned Corrective Actions: HUD approval was obtained before withdrawing the funds from the reserve for replacement account. However, we are unable to locate one of four reserve for replacement withdrawal approvals as a result of staff turnover. The withdrawal in question was for a short-term advance of funds which has already been repaid.
Show full finding ▾Hide full finding ▴2019-004 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Statement of Condition: The Project was unable to provide documentation supporting one of four withdrawals from the reserve for replacement account. Criteria: HUD requires Section 811 Projects to have HUD approval documented before withdrawing funds from the reserve for replacement account. Cause: The organization had staff turnover which led to accounting records being misplaced and existing staff unable to locate documents. Effect: The Project was not in compliance with Section 811 project requirements. Context: HUD regulations have specific guidelines for the withdrawal of funds from the reserve for replacement account. The Project did not adhere to the HUD guidelines. Recommendation: The Project should ensure that HUD authorizations are received before withdrawing funds from the reserve for replacement account and should file the HUD approvals in a designated file. Views of Responsible Officials and Planned Corrective Actions: HUD approval was obtained before withdrawing the funds from the reserve for replacement account. However, we are unable to locate one of four reserve for replacement withdrawal approvals as a result of staff turnover. The withdrawal in question was for a short-term advance of funds which has already been repaid.
Finding No. 2019-004 ? Section 811 Project, CFDA #14.181 Recommendation: The Project should ensure that HUD authorizations are received before withdrawing funds from the reserve for replacement account and should file the HUD approvals in a designated file. Action Taken: HUD approval was obtained before withdrawing the funds from the reserve for replacement account. However, we are unable to locate one of four reserve for replacement withdrawal approvals as a result of staff turnover. The withdrawal in question was for a short-term advance of funds which has already been repaid. We will continue to go through our records and if we cannot locate then we will contact HUD to verify that the withdrawal was approved.
The management agent billed the Project for allocated payroll costs based on budgeted amounts and not actual costs. Criteria: HUD requires Section 811 Projects to substantiate related party costs allocated to the Project. Cause: The organization had staff turnover which led to management agent personnel not adhering to procedures regarding substantiating and reconciling related party allocated costs. Effect: The Project was not in compliance with Section 811 project requirements and potentially overbilled the Project for its allocated payroll costs as of June 30, 2019. Context: The management agent was allocating personnel costs monthly based on budgeted costs and not actual costs as reflected in time sheets and payroll journals. Recommendation: The management agent should allocate payroll costs monthly based on actual costs incurred as reflected in time sheets and payroll journals. Views of Responsible Officials and Planned Corrective Actions: The Project did not actually pay the management agent the billed costs as of June 30, 2019 so we reduced the payable recorded as of June 30, 2019 to the management agent to reflect actual payroll costs documented as of June 30, 2019. As a result, the management agent did not actually receive the overbilled amount. Per the auditor?s recommendation we will have the management agent allocate payroll costs to the project based on actual time sheets and payroll journals.
Show full finding ▾Hide full finding ▴2019-005 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Statement of Condition: The management agent billed the Project for allocated payroll costs based on budgeted amounts and not actual costs. Criteria: HUD requires Section 811 Projects to substantiate related party costs allocated to the Project. Cause: The organization had staff turnover which led to management agent personnel not adhering to procedures regarding substantiating and reconciling related party allocated costs. Effect: The Project was not in compliance with Section 811 project requirements and potentially overbilled the Project for its allocated payroll costs as of June 30, 2019. Context: The management agent was allocating personnel costs monthly based on budgeted costs and not actual costs as reflected in time sheets and payroll journals. Recommendation: The management agent should allocate payroll costs monthly based on actual costs incurred as reflected in time sheets and payroll journals. Views of Responsible Officials and Planned Corrective Actions: The Project did not actually pay the management agent the billed costs as of June 30, 2019 so we reduced the payable recorded as of June 30, 2019 to the management agent to reflect actual payroll costs documented as of June 30, 2019. As a result, the management agent did not actually receive the overbilled amount. Per the auditor?s recommendation we will have the management agent allocate payroll costs to the project based on actual time sheets and payroll journals.
Finding No. 2019-005 ? Section 811 Project, CFDA #14.181 Recommendation: The management agent should allocate payroll costs monthly based on actual costs incurred as reflected in time sheets and payroll journals. Action Taken: The Project did not actually pay the management agent the billed costs as of June 30, 2019 so we reduced the payable recorded as of June 30, 2019 to the management agent to reflect actual payroll costs documented as of June 30, 2019. As a result, the management agent did not actually receive the overbilled amount. Per the auditor?s recommendation, we will have the management agent allocate payroll costs to the project based on actual time sheets and payroll journals.
The Project was tardy submitting its financial statement audit to the HUD Real Estate Assessment Center within ninety days of year end. Criteria: HUD requires Section 811 Projects to submit their financial statement audit to the Real Estate Assessment Center within ninety days of year end. Cause: The organization had staff turnover which led to the audit being submitted tardily. Effect: The Project was not in compliance with its Section 811 project regulatory requirements. Context: HUD regulations have specific guidelines for the timely submission of financial information. Recommendation: The Project should adhere to HUD guidelines concerning the time frame for submitting its financial statement audit. Views of Responsible Officials and Planned Corrective Actions: The Project submitted its financial statement audit to HUD in November 2019.
Show full finding ▾Hide full finding ▴2019-006 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Statement of Condition: The Project was tardy submitting its financial statement audit to the HUD Real Estate Assessment Center within ninety days of year end. Criteria: HUD requires Section 811 Projects to submit their financial statement audit to the Real Estate Assessment Center within ninety days of year end. Cause: The organization had staff turnover which led to the audit being submitted tardily. Effect: The Project was not in compliance with its Section 811 project regulatory requirements. Context: HUD regulations have specific guidelines for the timely submission of financial information. Recommendation: The Project should adhere to HUD guidelines concerning the time frame for submitting its financial statement audit. Views of Responsible Officials and Planned Corrective Actions: The Project submitted its financial statement audit to HUD in November 2019.
Finding No. 2019-006 ? Section 811 Project, CFDA #14.181 Recommendation: The Project should adhere to HUD guidelines concerning the time frame for submitting its financial statement audit. Action Taken: The Project submitted its financial statement audit to HUD in November 2019. In addition, we have hired new accounting personnel and training the new staff so that we will not have this issue going forward.
The Project was late depositing the required residual receipts deposit for the year ended June 30, 2019. Criteria: HUD requires Section 811 Projects to remit deposits to the residual receipts account if the organization has surplus cash as defined in the regulatory agreement. Cause: The organization had staff turnover which led to the delay in the calculation of surplus cash. Effect: The Project was not in compliance with Section 811 project requirements and did not remit the residual receipts deposit within ninety days of year end as required in the regulatory agreement. Context: HUD regulations have specific guidelines for the funding of the residual receipts account. The Project did not adhere to the HUD guidelines. Recommendation: The Project should adhere to HUD guidelines concerning funding of the residual receipts account and remit the missed deposit immediately. Views of Responsible Officials and Planned Corrective Actions: The Project will fund the residual receipts account immediately.
Show full finding ▾Hide full finding ▴2019-007 ? Section 811 Project, CFDA #14.181; Project No. 052-HD071; Grant Period- Year Ended June 30, 2019 Statement of Condition: The Project was late depositing the required residual receipts deposit for the year ended June 30, 2019. Criteria: HUD requires Section 811 Projects to remit deposits to the residual receipts account if the organization has surplus cash as defined in the regulatory agreement. Cause: The organization had staff turnover which led to the delay in the calculation of surplus cash. Effect: The Project was not in compliance with Section 811 project requirements and did not remit the residual receipts deposit within ninety days of year end as required in the regulatory agreement. Context: HUD regulations have specific guidelines for the funding of the residual receipts account. The Project did not adhere to the HUD guidelines. Recommendation: The Project should adhere to HUD guidelines concerning funding of the residual receipts account and remit the missed deposit immediately. Views of Responsible Officials and Planned Corrective Actions: The Project will fund the residual receipts account immediately.
Finding No. 2019-007 ? Section 811 Project, CFDA #14.181 Recommendation: The Project should adhere to HUD guidelines concerning funding of the residual receipts account and remit the missed deposit immediately. Action Taken: The Project will fund the residual receipts account immediately.
FAC accepted this audit on October 29, 2018 — management decision was due April 29, 2019.
FAC accepted this audit on March 30, 2018 — management decision was due September 30, 2018.
FAC accepted this audit on September 29, 2016 — management decision was due March 29, 2017.
GSA_MIGRATION
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GSA_MIGRATION
2015-001
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