EIN: 582065576
UEI: LRKEUQR5PA15
Audited by: Hezlep Nonprofit Advisors
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 February 17, 2026. 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 August 17, 2026 (12 days ago).
What is a management decision? →FAC accepted this audit on March 7, 2025 — management decision was due September 7, 2025.
During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provide signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
Show full finding ▾Hide full finding ▴2024-001 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provide signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
2024-001 Tenant Leases and Annual Recertifications Not Signed by Tenant Recommendation: We recommend policies are developed to ensure all required documents are signed. Action Taken We concur with the finding and will implement the recommendation immediately.
2023-002
South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2024. The Organization has not deposited the required reserve amount as of June 30, 2024. Cause: The Organization did not make the required replacement reserve account deposits prior to June 30, 2024. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2024, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD’s rules. Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Metro Homes, Inc. concurs with the recommendation. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $3,012 deposit in the year ended June 30, 2025.
Show full finding ▾Hide full finding ▴2024-002 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance – CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2024. The Organization has not deposited the required reserve amount as of June 30, 2024. Cause: The Organization did not make the required replacement reserve account deposits prior to June 30, 2024. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2024, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD’s rules. Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Metro Homes, Inc. concurs with the recommendation. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $3,012 deposit in the year ended June 30, 2025.
2024-002 Required Deposit Into a Replacement Reserve Account Not Made Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Action Taken: We concur with the recommendation. The Organization made a $3,012 deposit during fiscal year June 30, 2025, to the replacement reserve account to correct this deficiency.
FAC accepted this audit on June 17, 2024 — management decision was due December 17, 2024.
During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provided signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
Show full finding ▾Hide full finding ▴2023-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The individuals responsible for obtaining tenant signatures failed to provided signed documentation for file retention. Effect: The Organization is not in compliance with HUD’s requirement. Recommendation: We recommend the Organization develop policies and training practices to ensure all employees are aware of proper HUD requirements and that all documents are signed. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
2023-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Recommendation We recommend policies are developed to ensure all required documents are signed. Action Taken We concur with the finding and will implement the recommendation immediately.
2022-002
During the audit we noted a significant deficiency in the internal controls related to billing procedures. It was noted that client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments on numerous occasions. During the audit process, the Organization noted billing issues, performed an internal analysis, and brought the issue to the attention of the auditor. As a result, the Organization recorded an adjusting journal entry increasing client rent revenue by $4,846 and created additional billings for client rent to correct the billing errors. Cause: The Organization has had significant difficulties related to training and competency of accounting staff. Additionally, review procedures implemented were not sufficient to identify and correct billing errors in a timely manner. Effect: Client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments, therefore revenue was understated and additional client billings were deemed necessary. Recommendation: We recommend that accounting staff responsible for client billing is provided sufficient training and oversight. Additionally, we recommend that monthly billing of client rent is reviewed and reconciled in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Auditee Response: We concur with the finding and have begun implementing the recommendations.
Show full finding ▾Hide full finding ▴2023-003 Clients Not Billed in Accordance with the Housing Owner's Certification and Application for Housing Assistance Payments Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that client rent is billed on a monthly basis in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Condition: During the audit we noted a significant deficiency in the internal controls related to billing procedures. It was noted that client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments on numerous occasions. During the audit process, the Organization noted billing issues, performed an internal analysis, and brought the issue to the attention of the auditor. As a result, the Organization recorded an adjusting journal entry increasing client rent revenue by $4,846 and created additional billings for client rent to correct the billing errors. Cause: The Organization has had significant difficulties related to training and competency of accounting staff. Additionally, review procedures implemented were not sufficient to identify and correct billing errors in a timely manner. Effect: Client rent was not billed in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments, therefore revenue was understated and additional client billings were deemed necessary. Recommendation: We recommend that accounting staff responsible for client billing is provided sufficient training and oversight. Additionally, we recommend that monthly billing of client rent is reviewed and reconciled in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Auditee Response: We concur with the finding and have begun implementing the recommendations.
2023-003 Clients Not Billed in Accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments Recommendation: We recommend that accounting staff responsible for client billing is provided sufficient training and oversight. Additionally, we recommend that monthly billing of client rent is reviewed and reconciled in accordance with the Housing Owner’s Certification and Application for Housing Assistance Payments. Auditee Response: We concur with the finding and have begun implementing the recommendations.
FAC accepted this audit on March 7, 2023 — management decision was due September 7, 2023.
During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The Organization had limited access to tenants due to COVID pandemic and the quarantine recommendations in place. Effect: The Organization is not in compliance with HUD?s requirement. Recommendation: We recommend that documents are signed via mail or electronically if in person contact is not available. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
Show full finding ▾Hide full finding ▴HUD CFDA 14.181 2022-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Finding Related to: Compliance ? CDFA No. 14.181 Criteria: : The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The Organization had limited access to tenants due to COVID pandemic and the quarantine recommendations in place. Effect: The Organization is not in compliance with HUD?s requirement. Recommendation: We recommend that documents are signed via mail or electronically if in person contact is not available. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
HUD CFDA 14.181 2022-002 Tenant Leases and Annual Recertifications Not Signed by Tenant Finding Related to: Compliance ? CDFA No. 14.181 Recommendation We recommend documents are signed via mail or electronically if in person contact is not available. Action Taken We concur with the finding and will implement the recommendation immediately.
FAC accepted this audit on March 3, 2022 — management decision was due September 3, 2022.
South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2021. The Organization has only deposited $2,259 as of June 30, 2021. Cause: The deposit has not been made due to cash flow deficits and the uncertainty surrounding the filling of vacancies in the Organization?s homes. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2021, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: We concur with the finding and will make additional deposits in the replacement reserve account as funds are available.
Show full finding ▾Hide full finding ▴Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2021. The Organization has only deposited $2,259 as of June 30, 2021. Cause: The deposit has not been made due to cash flow deficits and the uncertainty surrounding the filling of vacancies in the Organization?s homes. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2021, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: We concur with the finding and will make additional deposits in the replacement reserve account as funds are available.
2021-002 Required Deposit Into a Replacement Reserve Account Not Made South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2021. The Organization has only deposited $2,259 as of June 30, 2021. Recommendation We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Action Taken We concur with the finding and will make additional deposits in the replacement reserve account as funds are available. Contact: Whitney Fuchs
2020-002
South Metro Homes, Inc. was required to receive approval for any withdrawals made from the replacement reserve account. The Organization withdrew $3,250 from the account for repairs and did not finalize obtaining HUD approval. Cause: Final HUD approval was not obtained due to employee turnover. Effect: South Metro Homes, Inc. should have obtained HUD approval for the $3,250 withdrawal from the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that South Metro Homes, Inc. obtain HUD approval prior to any withdraws from this account. Auditee Response: We concur with the finding and will return the unapproved withdrawal to the replacement reserve account as funds are available and will obtain HUD approval for any future withdraws.
Show full finding ▾Hide full finding ▴Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization receive approval for any withdrawals made from the replacement reserve account. Condition: South Metro Homes, Inc. was required to receive approval for any withdrawals made from the replacement reserve account. The Organization withdrew $3,250 from the account for repairs and did not finalize obtaining HUD approval. Cause: Final HUD approval was not obtained due to employee turnover. Effect: South Metro Homes, Inc. should have obtained HUD approval for the $3,250 withdrawal from the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that South Metro Homes, Inc. obtain HUD approval prior to any withdraws from this account. Auditee Response: We concur with the finding and will return the unapproved withdrawal to the replacement reserve account as funds are available and will obtain HUD approval for any future withdraws.
2021-003 Required HUD Approval Not Obtained Prior to Replacement Reserve Account Withdrawal South Metro Homes, Inc. was required to obtain HUD approval prior to the $3,250 withdrawal from the replacement reserve during the year ended June 30, 2021. The Organization withdrew the amount prior to obtaining approval. Recommendation We recommend the Organization not make additional withdraws unless HUD approval is obtained. Action Taken We concur with the finding and will make the replacement deposit in the replacement reserve account as funds are available and will not withdraw again without obtaining HUD approval first. Contact: Whitney Fuchs
FAC accepted this audit on June 16, 2021 — management decision was due December 16, 2021.
South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2020. The Organization has only deposited $2,259 as of June 30, 2020. Cause: The deposit has not been made due to cash flow deficits and the uncertainty surrounding the filling of vacancies in the Organization?s homes. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2020, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: We concur with the finding and will make additional deposits in the replacement reserve account as funds are available.
Show full finding ▾Hide full finding ▴Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2020. The Organization has only deposited $2,259 as of June 30, 2020. Cause: The deposit has not been made due to cash flow deficits and the uncertainty surrounding the filling of vacancies in the Organization?s homes. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2020, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: We concur with the finding and will make additional deposits in the replacement reserve account as funds are available.
FINANCIAL STATEMENT FINDINGS 2020-001 Internal Controls Over Financial Reporting During the audit we noted a material weakness in the accounting function including the following: - Lack of effective monthly and year-end closing procedures - Multiple material misstatements in the financial statements (corrected during the audit process) - Lack of a timely reconciliation of significant accounts (including client funds) - Significant variances in intercompany accounts at year end - Insufficient authorization/approval over general journal entries. - A lack of sufficient oversight over the accounting staff Recommendation We recommend that those charged with governance monitor the accounting function including the aforementioned areas. Action Taken We concur with the finding and will implement the recommendation immediately. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 2020-002 Required Deposit Into a Replacement Reserve Account Not Made South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2020. The Organization has only deposited $2,259 as of June 30, 2020. Recommendation We recommend that a deposit of $753 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Action Taken We concur with the finding and will make additional deposits in the replacement reserve account as funds are available. Contact: Whitney Fuchs
FAC accepted this audit on March 19, 2020 — management decision was due September 19, 2020.
FAC accepted this audit on March 24, 2019 — management decision was due September 24, 2019.
FAC accepted this audit on September 20, 2018 — management decision was due March 20, 2019.
FAC accepted this audit on September 26, 2016 — management decision was due March 26, 2017.
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