EIN: 521927032
UEI: WJ2HVDD314G8
Audited by: COHNREZNICK LLP
Oversight agency: 14 [Department of Housing and Urban Development]
Data as of August 27, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on October 28, 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 April 28, 2025 (487 days ago).
What is a management decision? →Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of June 30, 2024 is $39,106. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect Use of project funds for unauthorized loans may result in shortage of cash and default on projects own obligations. Questioned Costs The payments of $39,106 were unauthorized loans and therefore considered to be questioned costs. Identification as a Repeat Finding This finding is not a repeat finding. Recommendations The affiliated project should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G. Unauthorized loans from project funds View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for loans. Funds have been transferred and will maintain HUD policy of no unauthorized loans between affiliates. Finding Resolution Status: Resolved.
Show full finding ▾Hide full finding ▴Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of June 30, 2024 is $39,106. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect Use of project funds for unauthorized loans may result in shortage of cash and default on projects own obligations. Questioned Costs The payments of $39,106 were unauthorized loans and therefore considered to be questioned costs. Identification as a Repeat Finding This finding is not a repeat finding. Recommendations The affiliated project should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G. Unauthorized loans from project funds View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for loans. Funds have been transferred and will maintain HUD policy of no unauthorized loans between affiliates. Finding Resolution Status: Resolved.
Management agrees with the finding and recommendation and has reviewed the HUD requirement for loans. Funds have been transferred and will maintain HUD policy of no unauthorized loans between affiliates.
Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Condition As of June 30, 2024 management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $2,677. Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $2,677 as of June 30, 2024. Effect or Potential Effect Management commingled tenant security deposits with its operating cash and did not have sufficient cash balance in the tenant security deposits cash account to cover the tenant security deposits liability as of June 30, 2024. Questioned Costs N/A Identification as a Repeat Finding This finding is not a repeat finding. Recommendations Management should transfer $2,677 from the operating account in order to fully fund the tenant security deposits account. Auditor Noncompliance Code: M. Security Deposits View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for security deposits. Funds have been transferred and will maintain HUD policy. Finding Resolution Status: Resolved.
Show full finding ▾Hide full finding ▴Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Condition As of June 30, 2024 management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $2,677. Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $2,677 as of June 30, 2024. Effect or Potential Effect Management commingled tenant security deposits with its operating cash and did not have sufficient cash balance in the tenant security deposits cash account to cover the tenant security deposits liability as of June 30, 2024. Questioned Costs N/A Identification as a Repeat Finding This finding is not a repeat finding. Recommendations Management should transfer $2,677 from the operating account in order to fully fund the tenant security deposits account. Auditor Noncompliance Code: M. Security Deposits View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for security deposits. Funds have been transferred and will maintain HUD policy. Finding Resolution Status: Resolved.
Management agrees with the finding and recommendation and has reviewed the HUD requirement for security deposits. Funds have been transferred and will maintain HUD policy.
Criteria Residual receipts reserve deposits should be made within 90 days of year end and excess residual receipts are required to be remitted to HUD upon receipt of HUD approval. Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD. Additionally, once funded to the residual receipts reserve, since the deposit would have exceeded the residual receipts maximum, management should have requested approval from HUD to remit the excess residual receipts funds back to HUD. Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due, was paid from the operating account when it should have been paid from the residual receipts account. Management should reimburse the operating account from the residual receipts account. Cause Controls were not in place to ensure that residual receipts funds were timely deposited and remitted, if applicable. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement and of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $35,468 Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B. Failure to make required residual receipts deposits. Views of Responsible Officials Management agrees with the finding and has done the following: - Transferred $2,791 to the residual receipts account from the operating account. - Transferred $35,468 to the residual receipts account from the operating account. - We will ensure transfers are completed going forward and management will work with HUD to get approval to release the funds from the residual receipts account and remit them to HUD, as necessary. Finding Resolution Status: In process.
Show full finding ▾Hide full finding ▴Criteria Residual receipts reserve deposits should be made within 90 days of year end and excess residual receipts are required to be remitted to HUD upon receipt of HUD approval. Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD. Additionally, once funded to the residual receipts reserve, since the deposit would have exceeded the residual receipts maximum, management should have requested approval from HUD to remit the excess residual receipts funds back to HUD. Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due, was paid from the operating account when it should have been paid from the residual receipts account. Management should reimburse the operating account from the residual receipts account. Cause Controls were not in place to ensure that residual receipts funds were timely deposited and remitted, if applicable. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement and of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $35,468 Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B. Failure to make required residual receipts deposits. Views of Responsible Officials Management agrees with the finding and has done the following: - Transferred $2,791 to the residual receipts account from the operating account. - Transferred $35,468 to the residual receipts account from the operating account. - We will ensure transfers are completed going forward and management will work with HUD to get approval to release the funds from the residual receipts account and remit them to HUD, as necessary. Finding Resolution Status: In process.
Management agrees with the finding and has transferred the residual receipts. We will ensure transfers are completed going forward and management will work with HUD to get approval to release the funds from the residual receipts account and remit them to HUD, as necessary.
Criteria 1. Management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 2. Management is responsible for timely submission of audited financial statements to Federal Audit Clearinghouse ("FAC"). Condition 1. The accounting records required numerous material adjustments to be proposed and recorded in order for the financial statements to be fairly presented in accordance with generally accepted accounting principles in the United States of America. 2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial statements was not completed within specified time frame. Cause Management did not have sufficient controls over financial reporting. Effect or Potential Effect Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial statements such that they are not in accordance with accounting principles generally accepted in the United States of America. Condition 2 results in auditee being designated as not a lowrisk auditee, which may have an effect on future federal grants and program eligibility. Recommendation 1. Management should undertake a review of internal controls over financial reporting and ensure that financial data is properly recorded in the books and records of the Project to prevent misstatements from occurring in the future. 2. Management should implement procedures to ensure that required filing is completed timely. Auditor Noncompliance Code: S. Internal control deficiencies Views of Responsible Officials 1. Management agrees with the finding and recommendation and has implemented reviews of the financial statements by senior management prior to closing books to ensure accuracy of information. 2. Management agrees with the finding and recommendation and will ensure required filing is completed timely. Finding Resolution Status: Resolved.
Show full finding ▾Hide full finding ▴Criteria 1. Management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 2. Management is responsible for timely submission of audited financial statements to Federal Audit Clearinghouse ("FAC"). Condition 1. The accounting records required numerous material adjustments to be proposed and recorded in order for the financial statements to be fairly presented in accordance with generally accepted accounting principles in the United States of America. 2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial statements was not completed within specified time frame. Cause Management did not have sufficient controls over financial reporting. Effect or Potential Effect Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial statements such that they are not in accordance with accounting principles generally accepted in the United States of America. Condition 2 results in auditee being designated as not a lowrisk auditee, which may have an effect on future federal grants and program eligibility. Recommendation 1. Management should undertake a review of internal controls over financial reporting and ensure that financial data is properly recorded in the books and records of the Project to prevent misstatements from occurring in the future. 2. Management should implement procedures to ensure that required filing is completed timely. Auditor Noncompliance Code: S. Internal control deficiencies Views of Responsible Officials 1. Management agrees with the finding and recommendation and has implemented reviews of the financial statements by senior management prior to closing books to ensure accuracy of information. 2. Management agrees with the finding and recommendation and will ensure required filing is completed timely. Finding Resolution Status: Resolved.
1. Management agrees with the finding and recommendation and has implemented reviews of the financial statements by senior management prior to closing books to ensure accuracy of information. 2. Management agrees with the finding and recommendation and will ensure required filing is completed timely.
Criteria The property does not have a current Affirmative Fair Housing Marketing Plan. Condition In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, management must review and update the Affirmative Fair Housing Marketing Plan at least every five years. Cause Procedures were not in place to ensure proper documentation was maintained upon the change of management. Effect or Potential Effect Absent these written documents, the project could open itself up to mistakes in marketing and leasing activity that could put their PRAC contract at risk upon renewal. Questioned Costs N/A Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should maintain an Affirmative Fair Housing Marketing Plan and update it every five years. Auditor Noncompliance Code: Z. Other Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management has submitted their Affirmative Fair Housing Marketing Plan with an effective date of September 26, 2024. Finding Resolution Status: Resolved.
Show full finding ▾Hide full finding ▴Criteria The property does not have a current Affirmative Fair Housing Marketing Plan. Condition In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, management must review and update the Affirmative Fair Housing Marketing Plan at least every five years. Cause Procedures were not in place to ensure proper documentation was maintained upon the change of management. Effect or Potential Effect Absent these written documents, the project could open itself up to mistakes in marketing and leasing activity that could put their PRAC contract at risk upon renewal. Questioned Costs N/A Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should maintain an Affirmative Fair Housing Marketing Plan and update it every five years. Auditor Noncompliance Code: Z. Other Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management has submitted their Affirmative Fair Housing Marketing Plan with an effective date of September 26, 2024. Finding Resolution Status: Resolved.
Management agrees with the finding and is working with ownership on reimbursements to the property. Management has submitted their Affirmative Fair Housing Marketing Plan with an effective date of September 26, 2024.
Criteria Management fee payments are limited to amounts determined in accordance with the terms of the HUD approved management agreement. Condition During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of the amount approved by HUD. Cause There were two different management agreements and management did not follow the HUD approved management agreement when paying management fees from operations. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $6,208 Identification as a Repeat Finding This is not a repeat finding. Recommendation The management company should reimburse the project for overpaid management fee in the amount of $6,208 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the HUD approved management agreement. Auditor Noncompliance Code: J. Unauthorized management fees Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward. Finding Resolution Status: In process.
Show full finding ▾Hide full finding ▴Criteria Management fee payments are limited to amounts determined in accordance with the terms of the HUD approved management agreement. Condition During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of the amount approved by HUD. Cause There were two different management agreements and management did not follow the HUD approved management agreement when paying management fees from operations. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $6,208 Identification as a Repeat Finding This is not a repeat finding. Recommendation The management company should reimburse the project for overpaid management fee in the amount of $6,208 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the HUD approved management agreement. Auditor Noncompliance Code: J. Unauthorized management fees Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward. Finding Resolution Status: In process.
Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward.
FAC accepted this audit on May 20, 2024 — management decision was due November 20, 2024.
Finding No. 2023-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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 the following deficiency: One out of eight existing tenants tested had EIVs that were performed outside of the 120- day EIV window. One out of one new tenants tested had an initial EIV certification that was performed outside of the 90-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant 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 There are no questioned costs. Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that 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: Section 202 Supportive Housing for the Elderly program administration. Finding Resolution Status: Resolved. Views of Responsible Officials The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. The Franklin Johnston EIV policies and procedures require site staff to Run Existing tenant searches within 90 days prior to the move in date which is required to be uploaded to the assigned Compliance specialist for review prior to move in approvals. Although HUD requires quarterly reports, the new management require monthly. Site teams are only permitted to pull the “By Head of Household Report” at the time of recertification. 90- day EIV’s are to be ran within 90days of the anticipated voucher submission date. Site staff are required to go through our approval process, staff are not required to perform a move with without Compliance Approval. The Franklin Johnston performs quarterly audits to ensure that these processes are being followed along with ensuring that the files are being properly maintained. All site teams members have been trained as it relates to these policies. In addition to this training all site teams are required to attend monthly EIV training/Policies and procedures trainings according to HUD guidelines.
Show full finding ▾Hide full finding ▴Finding No. 2023-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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 the following deficiency: One out of eight existing tenants tested had EIVs that were performed outside of the 120- day EIV window. One out of one new tenants tested had an initial EIV certification that was performed outside of the 90-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant 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 There are no questioned costs. Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that 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: Section 202 Supportive Housing for the Elderly program administration. Finding Resolution Status: Resolved. Views of Responsible Officials The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. The Franklin Johnston EIV policies and procedures require site staff to Run Existing tenant searches within 90 days prior to the move in date which is required to be uploaded to the assigned Compliance specialist for review prior to move in approvals. Although HUD requires quarterly reports, the new management require monthly. Site teams are only permitted to pull the “By Head of Household Report” at the time of recertification. 90- day EIV’s are to be ran within 90days of the anticipated voucher submission date. Site staff are required to go through our approval process, staff are not required to perform a move with without Compliance Approval. The Franklin Johnston performs quarterly audits to ensure that these processes are being followed along with ensuring that the files are being properly maintained. All site teams members have been trained as it relates to these policies. In addition to this training all site teams are required to attend monthly EIV training/Policies and procedures trainings according to HUD guidelines.
Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding # 2023‐001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 a. Recommendation: Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs b. Action(s) Taken or Planned on the Finding The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. The Franklin Johnston EIV policies and procedures require site staff to Run Existing tenant searches within 90 days prior to the move in date which is required to be uploaded to the assigned Compliance specialist for review prior to move in approvals. Although HUD requires quarterly reports, we require monthly. Site teams are only permitted to pull the “By Head of Household Report” at the time of recertification. 90- day EIV’s are to be ran within 90days of the anticipated voucher submission date. Site staff are required to go through our approval process, staff are not required to perform a move with without Compliance Approval. The Franklin Johnston performs quarterly audits to ensure that these processes are being followed along with ensuring that the files are being properly maintained. All site teams members have been trained as it relates to these policies. In addition to this training all site teams are required to attend monthly EIV training/Policies and procedures trainings according to HUD guidelines.
2022-001
Finding No. 2023-002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 Criteria Excess residual receipts funds should be remitted to HUD upon receipt of HUD approval. Condition The management received HUD approval to remit excess residual receipts funds in the amount of $2,794, on June 8, 2022. The funds have not been remitted to HUD as of June 30, 2023. Cause Controls were not in place to ensure that excess residual receipts funds were timely remitted. Effect or Potential Effect The Organization is not in compliance with the requirements of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $2,794 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Finding Resolution Status: Resolved. Views of Responsible Officials The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. When the Franklin Johnston Group took over, the new management were unable to get in contact with HUD for months to receive confirmation wiring instructions. HUD requires residual receipts to be remitted and deposited no later than the termination/renewal date. The Franklin Johnston Group just received confirmation wiring instructions as of January 2024. Funds of $2,794 are now paid as of January of 2024. The Franklin Johnston Group will ensure that moving forward all residual receipts are to be remitted and expedited in a timely matter.
Show full finding ▾Hide full finding ▴Finding No. 2023-002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 Criteria Excess residual receipts funds should be remitted to HUD upon receipt of HUD approval. Condition The management received HUD approval to remit excess residual receipts funds in the amount of $2,794, on June 8, 2022. The funds have not been remitted to HUD as of June 30, 2023. Cause Controls were not in place to ensure that excess residual receipts funds were timely remitted. Effect or Potential Effect The Organization is not in compliance with the requirements of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $2,794 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Finding Resolution Status: Resolved. Views of Responsible Officials The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. When the Franklin Johnston Group took over, the new management were unable to get in contact with HUD for months to receive confirmation wiring instructions. HUD requires residual receipts to be remitted and deposited no later than the termination/renewal date. The Franklin Johnston Group just received confirmation wiring instructions as of January 2024. Funds of $2,794 are now paid as of January of 2024. The Franklin Johnston Group will ensure that moving forward all residual receipts are to be remitted and expedited in a timely matter.
Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding # 2023‐002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 a. Recommendation: Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. b. Action(s) Taken or Planned on the Finding The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. When the Franklin Johnston group took over, we were unable to get in contact with HUD for months to receive Confirmation wiring instructions. HUD requires Residual receipts to be remitted and deposited no later than the termination/renewal date. The Franklin Johnston group just received confirmation wiring instructions as of January 2024. Funds of $2,794.00 are now paid as of January of 2024. The Franklin Johnston Group will ensure that moving forward all residual receipts are to be remitted and expedited in a timely matter.
FAC accepted this audit on January 8, 2023 — management decision was due July 8, 2023.
Finding No. 2022-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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 the following deficiency: Six out of nine existing tenants tested had EIVs that were performed outside of 120-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant 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 There are no questioned costs. Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that 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: Section 202 Supportive Housing for the Elderly program administration. Finding Resolution Status: Resolved. Views of Responsible Officials Management hired additional oversight staff at the corporate level and changed the procedure for reviewing and approving annual certifications as well as monitoring EIV reporting. Management implemented new EIV procedures to ensure timely EIV reporting. All HUD staff has been trained on the new procedures.
Show full finding ▾Hide full finding ▴Finding No. 2022-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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 the following deficiency: Six out of nine existing tenants tested had EIVs that were performed outside of 120-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant 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 There are no questioned costs. Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that 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: Section 202 Supportive Housing for the Elderly program administration. Finding Resolution Status: Resolved. Views of Responsible Officials Management hired additional oversight staff at the corporate level and changed the procedure for reviewing and approving annual certifications as well as monitoring EIV reporting. Management implemented new EIV procedures to ensure timely EIV reporting. All HUD staff has been trained on the new procedures.
Finding 2022-001 a. Comments on the Finding and Each Recommendation Management agrees with the finding. b. Action(s) Taken or Planned on the Finding In 2022 we hired additional oversight staff at the corporate level and changed the procedure for reviewing and approving annual certifications as well as monitoring EIV reporting. We have implanted new EIV procedures to ensure timely EIV reporting. All HUD staff has been trained on the new procedures.
Finding No. 2022-002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 Criteria Residual receipts reserve deposits should be made within 90 days of year end. Condition During the year ended June 30, 2022, management did not make the required residual receipts reserve deposit in the amount of $2,791 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on March 25, 2022. Cause Controls were not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement. Questioned Costs $2,791 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Finding Resolution Status: Resolved. Views of Responsible Officials The residual receipts deposit was not made timely due to a turnover in staff. Management has trained all accounting staff on this process and the controller has implemented tracking procedures to ensure timely deposits.
Show full finding ▾Hide full finding ▴Finding No. 2022-002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 Criteria Residual receipts reserve deposits should be made within 90 days of year end. Condition During the year ended June 30, 2022, management did not make the required residual receipts reserve deposit in the amount of $2,791 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on March 25, 2022. Cause Controls were not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement. Questioned Costs $2,791 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Finding Resolution Status: Resolved. Views of Responsible Officials The residual receipts deposit was not made timely due to a turnover in staff. Management has trained all accounting staff on this process and the controller has implemented tracking procedures to ensure timely deposits.
Finding 2022-002 a. Comments on the Finding and Each Recommendation Management agrees with the finding. b. Action(s) Taken or Planned on the Finding The Residual Receipts deposit was not made timely due to a turnover in staff. Management has trained all accounting staff on this process and the Controller has implemented tracking procedures to insure timely deposits.
FAC accepted this audit on October 19, 2021 — management decision was due April 19, 2022.
A. Summary of Auditor's Results 1. The auditor's report expresses an unmodified opinion on whether the financial statements of The Harry and Jeanette Weinberg Terrace, Inc. were prepared in accordance with generally accepted accounting principles. 2. No significant deficiencies related to the audit of the financial statements were reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. No material weaknesses were reported. 3. No instances of noncompliance material to the financial statements of The Harry and Jeanette Weinberg Terrace, Inc., which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. A significant deficiency in internal control over the major federal awards program was disclosed during the audit and reported in the Independent Auditor's Report on Compliance for the Major Program and on Internal Control over Compliance Required by the Uniform Guidance. No material weaknesses were reported. 5. The auditor's report on compliance for the major federal award program for The Harry and Jeanette Weinberg Terrace, Inc. expresses a qualified opinion on the major federal program. 6. There is one audit finding required to be reported in accordance with 2 CFR Section 200.516(a) in the Schedule. 7. The program tested as a major program was: U.S. Department of Housing and Urban Development Supportive Housing for the Elderly CFDA No.14.157 8. The threshold for distinguishing between Type A and B programs was $750,000. 9. The Harry and Jeanette Weinberg Terrace, Inc. was not determined to be a low-risk auditee. B. Findings - Financial Statements Audit None C. Findings and Questioned Costs - Major Federal Award Program Audit Department of Housing and Urban Development Finding No. 2021-001; Section 202 Supportive Housing for the Elderly, CFDA 14.157 Statement of Condition As of June 30, 2021, management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $2,451. Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Questioned Costs $2,451 Effect Management inadvertently transferred too much cash from the security deposit because they did not take into account the liability recorded for interest on security deposits. Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $2,451 as of June 30, 2021. Recommendation Management should transfer $2,451 from the operating account in order to fully fund the tenant security deposits account and ensure that they include the security deposit liability when checking if the security cash account is appropriately funded. Auditor Noncompliance Code: D - Comingling of funds Finding Resolution Status: Resolved. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and the auditor's recommendation has been implemented. Transfer of cash to fully cover the liability, including accrued interest, was made into the security deposit account on July 30, 2021.
Show full finding ▾Hide full finding ▴A. Summary of Auditor's Results 1. The auditor's report expresses an unmodified opinion on whether the financial statements of The Harry and Jeanette Weinberg Terrace, Inc. were prepared in accordance with generally accepted accounting principles. 2. No significant deficiencies related to the audit of the financial statements were reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. No material weaknesses were reported. 3. No instances of noncompliance material to the financial statements of The Harry and Jeanette Weinberg Terrace, Inc., which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. A significant deficiency in internal control over the major federal awards program was disclosed during the audit and reported in the Independent Auditor's Report on Compliance for the Major Program and on Internal Control over Compliance Required by the Uniform Guidance. No material weaknesses were reported. 5. The auditor's report on compliance for the major federal award program for The Harry and Jeanette Weinberg Terrace, Inc. expresses a qualified opinion on the major federal program. 6. There is one audit finding required to be reported in accordance with 2 CFR Section 200.516(a) in the Schedule. 7. The program tested as a major program was: U.S. Department of Housing and Urban Development Supportive Housing for the Elderly CFDA No.14.157 8. The threshold for distinguishing between Type A and B programs was $750,000. 9. The Harry and Jeanette Weinberg Terrace, Inc. was not determined to be a low-risk auditee. B. Findings - Financial Statements Audit None C. Findings and Questioned Costs - Major Federal Award Program Audit Department of Housing and Urban Development Finding No. 2021-001; Section 202 Supportive Housing for the Elderly, CFDA 14.157 Statement of Condition As of June 30, 2021, management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $2,451. Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Questioned Costs $2,451 Effect Management inadvertently transferred too much cash from the security deposit because they did not take into account the liability recorded for interest on security deposits. Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $2,451 as of June 30, 2021. Recommendation Management should transfer $2,451 from the operating account in order to fully fund the tenant security deposits account and ensure that they include the security deposit liability when checking if the security cash account is appropriately funded. Auditor Noncompliance Code: D - Comingling of funds Finding Resolution Status: Resolved. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and the auditor's recommendation has been implemented. Transfer of cash to fully cover the liability, including accrued interest, was made into the security deposit account on July 30, 2021.
PA-HUD-201 CORRECTIVE ACTION PLAN Project Legal Name: The Harry and Jeanette Weinberg Terrace, Inc. HUD Project No.: 052-EE015 Audit Firm: Cohn Reznick Period covered by the audit: July 1, 2020-June 30, 2021 Corrective Action Plan prepared by: Name: Sheri McGowan Position: CFO Telephone Number: 443-259-4932 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding 2021-1 a. Comments on the Finding and Each Recommendation We agree with the finding and recommendations b. Action(s) Taken or Planned on the Finding Due to a change in accounting staff, interest on Security Deposits held was not taken into consideration in determining the amount of funds that should be in the Security Deposit Bank Account. The funds have been transferred and the staff has been trained on this procedure. B. Status of Corrective Actions on Findings Reported in the Schedule of the Status of Prior Year Findings, Questioned Costs and Recommendations There are no prior year findings.
FAC accepted this audit on October 17, 2016 — management decision was due April 17, 2017.
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