EIN: 910853790
UEI: M8VMQZRMJMY5
Audited by: Finney, Neill & Company, P.S.
Oversight agency: 14 [Department of Housing and Urban Development]
View federal awards & risk assessment →
Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 10, 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 December 10, 2026 (103 days from today).
What is a management decision? →FAC accepted this audit on May 15, 2025 — management decision was due November 15, 2025.
FAC accepted this audit on September 27, 2024 — management decision was due March 27, 2025.
FAC accepted this audit on September 28, 2023 — management decision was due March 28, 2024.
FAC accepted this audit on August 14, 2022 — management decision was due February 14, 2023.
FAC accepted this audit on August 4, 2021 — management decision was due February 4, 2022.
FAC accepted this audit on September 29, 2020 — management decision was due March 29, 2021.
2019-001 Accounting System, Processes and Reporting Finding: Internal control processes over financial accounting did not ensure that all transactions were properly recorded and that appropriate supporting documentation was retained. Internal control processes over financial accounting did not ensure that key accounts were reconciled or reviewed on a periodic basis. Identification as a Repeat Finding: Finding 2019-001 is a repeat of Finding 2018-001. Criteria: Kawabe Memorial House is responsible for day-to-day transactional accounting, as well as monthly, quarterly and annual financial statement reporting. As such, Kawabe Memorial House is responsible for implementing adequate procedures to ensure that such information and reports are accurate and complete. Uniform Guidance section 2 CFR200.303(a), Internal Controls, requires that non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations and the terms and conditions. Additional Uniform Guidance section 2 CFR200.508(d), Auditee Responsibilities, requires that auditees ?Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit?? Condition and Context: During the course of the 2019 audit, we noted that Kawabe Memorial House did not have adequate supporting documentation for revenue and expense transactions, such as: - Bank deposit details are not reconciled to tenant receipts recorded by Kawabe Memorial House in accounting records; - Incomplete or missing account balance reconciliations for certain bank accounts, accounts receivable details, prepaid expenses, and accrued liabilities and accounts payable; Missing supporting documents for credit card purchases between January and April 2019; The accounting system policies and procedures did not prevent editing and/or modifying historical transactions that had been recorded in the computerized accounting system, such as: - Entering transactions into prior months and/or years after month end bank reconciliations have been prepared; - Editing of existing transactions ? whereby transaction dates, amounts, names and account codes could be edited During the first six months of 2019, we identified: amounts miscoded to general ledger accounts, approval of transactions was not completely documented, journal entries were not reviewed by a person independent of the preparer, invoices from vendors were not entered into the accounting system completely or paid timely, and cash and checks received from tenants and grantors were not deposited timely. As of December 31, 2019, we noted significant asset and liability balances which were not reconciled at year-end to the underlying supporting documents or reviewed by management, resulting in a significant number of audit adjustments required. Effect: These weaknesses resulted in the potential material misstatement of internally prepared financial statements. Without adequate reconciliation and review procedures in place, the Organization may provide its internal management and third parties with information that is inaccurate or incomplete. Without adequate controls and review procedures, the Organization may incorrectly process a transaction and not detect the error. We were unable to obtain sufficient appropriate documentation related to the financial statements to provide a basis for an opinion on the results of operations and cash flows of the Organization in 2019. We were unable to obtain sufficient appropriate documentation related to the major federal award programs (CFDA 14.155 and 14.195), and therefore, we are unable to determine whether the Organization complied with the requirements of the programs. Cause: There were minimal procedures and internal controls in place to require that: all transactions are properly documented, the ability to modify and change past transactions is limited, periodic review and approval of transactions is required, or that reconciliation of balances to underlying supporting documentation is performed. Sample Size and Population: Sampling was not applicable to this finding. Recommendations: 1. Enhance procedures to ensure that all financial transactions are properly recorded and supported by appropriate documents, records and reconciliations. 2. Review its accounting and control procedures to ensure that all transactions are properly reviewed and approved by management. 3. Establish systems of control to prohibit and prevent modification of transactions in the accounting system. 4. Implement procedures to ensure that reports provided to its Board, internal management, and third-parties are accurate and complete. Questioned Costs: None. Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-001 Accounting System, Processes and Reporting Finding: Internal control processes over financial accounting did not ensure that all transactions were properly recorded and that appropriate supporting documentation was retained. Internal control processes over financial accounting did not ensure that key accounts were reconciled or reviewed on a periodic basis. Identification as a Repeat Finding: Finding 2019-001 is a repeat of Finding 2018-001. Criteria: Kawabe Memorial House is responsible for day-to-day transactional accounting, as well as monthly, quarterly and annual financial statement reporting. As such, Kawabe Memorial House is responsible for implementing adequate procedures to ensure that such information and reports are accurate and complete. Uniform Guidance section 2 CFR200.303(a), Internal Controls, requires that non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations and the terms and conditions. Additional Uniform Guidance section 2 CFR200.508(d), Auditee Responsibilities, requires that auditees ?Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit?? Condition and Context: During the course of the 2019 audit, we noted that Kawabe Memorial House did not have adequate supporting documentation for revenue and expense transactions, such as: - Bank deposit details are not reconciled to tenant receipts recorded by Kawabe Memorial House in accounting records; - Incomplete or missing account balance reconciliations for certain bank accounts, accounts receivable details, prepaid expenses, and accrued liabilities and accounts payable; Missing supporting documents for credit card purchases between January and April 2019; The accounting system policies and procedures did not prevent editing and/or modifying historical transactions that had been recorded in the computerized accounting system, such as: - Entering transactions into prior months and/or years after month end bank reconciliations have been prepared; - Editing of existing transactions ? whereby transaction dates, amounts, names and account codes could be edited During the first six months of 2019, we identified: amounts miscoded to general ledger accounts, approval of transactions was not completely documented, journal entries were not reviewed by a person independent of the preparer, invoices from vendors were not entered into the accounting system completely or paid timely, and cash and checks received from tenants and grantors were not deposited timely. As of December 31, 2019, we noted significant asset and liability balances which were not reconciled at year-end to the underlying supporting documents or reviewed by management, resulting in a significant number of audit adjustments required. Effect: These weaknesses resulted in the potential material misstatement of internally prepared financial statements. Without adequate reconciliation and review procedures in place, the Organization may provide its internal management and third parties with information that is inaccurate or incomplete. Without adequate controls and review procedures, the Organization may incorrectly process a transaction and not detect the error. We were unable to obtain sufficient appropriate documentation related to the financial statements to provide a basis for an opinion on the results of operations and cash flows of the Organization in 2019. We were unable to obtain sufficient appropriate documentation related to the major federal award programs (CFDA 14.155 and 14.195), and therefore, we are unable to determine whether the Organization complied with the requirements of the programs. Cause: There were minimal procedures and internal controls in place to require that: all transactions are properly documented, the ability to modify and change past transactions is limited, periodic review and approval of transactions is required, or that reconciliation of balances to underlying supporting documentation is performed. Sample Size and Population: Sampling was not applicable to this finding. Recommendations: 1. Enhance procedures to ensure that all financial transactions are properly recorded and supported by appropriate documents, records and reconciliations. 2. Review its accounting and control procedures to ensure that all transactions are properly reviewed and approved by management. 3. Establish systems of control to prohibit and prevent modification of transactions in the accounting system. 4. Implement procedures to ensure that reports provided to its Board, internal management, and third-parties are accurate and complete. Questioned Costs: None. Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. The prior executive director and office manager did not maintain documents, records, reconciliations, and other critical documents in a manner which would facilitate the preparation of accurate and complete accounting and other financial reports. We understand the auditors' findings, and have taken steps to correct the issues identified. We are reviewing the accounting and financial procedures, system of internal controls and policies of the organization. During April 2019 we have implemented review and oversite of all financial systems by members of the Board and we have continued to work to improve our accounting process and systems in 2020. We are seeking accounting and finance assistance from third-party professionals and are evaluating the possibility of outsourcing the management of the property to a professional third-party organization.
2018-001
2019-002 Eligibility - Tenant File Documentation CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-002 is a repeat of Finding 2018-004. Finding: The tenant files did not fully comply with HUD documentation requirements. Criteria: HUD has established various compliance requirements related to the use of Federal funds. These compliance requirements impact many areas of HUD compliance and reporting such as, but not limited to, tenant certifications and recertification procedures, tenant income eligibility, document retention requirements and documentation within tenant files. Sample Size and Population: Population is the number of subsidized units in the project, totaling 80. Sample size selected was 8. Condition, context, and cause: The following instances of noncompliance with specific HUD compliance requirements are noted as follows:? Four out of eight tenant files selected for testing - documentation of the Enterprise Income Verification (EIV) system reports utilized during the tenant application process was not maintained in the tenant file. ? The required EIV reports were not run consistently throughout the year. ? Certain other required documentation was missing or incomplete, such as signed and completed lease agreements, notification of rent increases with appropriate advance notice, timely annual recertifications, and tenant application and waitlist procedures not completed timely. Effect: Tenant files did not contain complete, accurate or appropriate documentation required by HUD. Recommendation: The specific documentation required by HUD should be maintained in the tenant files and the tenant files should be reviewed periodically for completeness. The EIV reports should be run and maintained in accordance with HUD guidelines and internal policies. Management should implement a process to track recertification due dates and checklists to ensure required recertification procedures are completed. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-002 Eligibility - Tenant File Documentation CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-002 is a repeat of Finding 2018-004. Finding: The tenant files did not fully comply with HUD documentation requirements. Criteria: HUD has established various compliance requirements related to the use of Federal funds. These compliance requirements impact many areas of HUD compliance and reporting such as, but not limited to, tenant certifications and recertification procedures, tenant income eligibility, document retention requirements and documentation within tenant files. Sample Size and Population: Population is the number of subsidized units in the project, totaling 80. Sample size selected was 8. Condition, context, and cause: The following instances of noncompliance with specific HUD compliance requirements are noted as follows:? Four out of eight tenant files selected for testing - documentation of the Enterprise Income Verification (EIV) system reports utilized during the tenant application process was not maintained in the tenant file. ? The required EIV reports were not run consistently throughout the year. ? Certain other required documentation was missing or incomplete, such as signed and completed lease agreements, notification of rent increases with appropriate advance notice, timely annual recertifications, and tenant application and waitlist procedures not completed timely. Effect: Tenant files did not contain complete, accurate or appropriate documentation required by HUD. Recommendation: The specific documentation required by HUD should be maintained in the tenant files and the tenant files should be reviewed periodically for completeness. The EIV reports should be run and maintained in accordance with HUD guidelines and internal policies. Management should implement a process to track recertification due dates and checklists to ensure required recertification procedures are completed. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. The prior executive director and office manager did not ensure that the tenant files contained complete, accurate or appropriate documentation as required by HUD. In addition, they did not comply with tenant recertification requirements or hee security or documentation requiremnts Enterprise Income Verification (EIV) System. We understand the auditors' finding and have implemented tenant file review procedures, review policy and procedures regarding the use of EIV and retention of EIV documentation, and require that each file contain all required documentation. We have also implemented procedures to comply with tenant recertifiation requirements.
2018-004
2019-003 Special Tests and Provisions ? Vacant Units CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-003 is a repeat of Finding 2018-005. Finding: During 2019 the Project did not properly reduce its claims for vacant units or accurately report vacancies to HUD. Criteria: The Project owner may not claim assistance for vacant units. Sample Size and Population: Population is the number of subsidized units in the project, totaling 80. Condition, context and cause: The following instances of noncompliance with specific HUD compliance requirements are noted as follows: ? HUD was billed for several vacant units for up to six months after tenant move-out date, prior to correction. ? Vacancies reported to HUD were not supported by underlying rent roll data. Effect: Invoices were submitted to HUD for unoccupied units amounting to approximately $30,000 throughout 2019. Subsequent invoices were corrected after errors were identified by management. Recommendation: We recommend the Project perform a reconciliation of their rent roll reports to the monthly HAP invoices on a monthly basis, and ensure no vacant units are included. Questioned Costs: $30,000 Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-003 Special Tests and Provisions ? Vacant Units CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-003 is a repeat of Finding 2018-005. Finding: During 2019 the Project did not properly reduce its claims for vacant units or accurately report vacancies to HUD. Criteria: The Project owner may not claim assistance for vacant units. Sample Size and Population: Population is the number of subsidized units in the project, totaling 80. Condition, context and cause: The following instances of noncompliance with specific HUD compliance requirements are noted as follows: ? HUD was billed for several vacant units for up to six months after tenant move-out date, prior to correction. ? Vacancies reported to HUD were not supported by underlying rent roll data. Effect: Invoices were submitted to HUD for unoccupied units amounting to approximately $30,000 throughout 2019. Subsequent invoices were corrected after errors were identified by management. Recommendation: We recommend the Project perform a reconciliation of their rent roll reports to the monthly HAP invoices on a monthly basis, and ensure no vacant units are included. Questioned Costs: $30,000 Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. The prior executive director and office management did not maintain appropriate rent roll reports and did not present accurate reports regarding vacant units to the Board of Directors. We understand the auditors' finding and will implement procedures to prepare and maintain accurate rent roll reports for each month and comply with HUD requirements regarding vacant units.
2018-005
2019-004 Special Tests & Provisions - HUD Enforcement Actions CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-004 is a repeat of Finding 2018-006. Finding: Kawabe Memorial House did not comply with the terms and requirements of their Housing Assistance Payments (HAP) contract in 2018 related to resolving compliance deficiencies identified by HUD in a timely manner. Criteria: The Project shall comply with HUD guidelines and regulations regarding the acceptance and use of Housing Assistance Payments (HAP). Sample Size and Population: Sampling was not applicable to this finding. Condition and context: HUD performed a ?Management and Occupancy Review? during May 2018 and notified Kawabe Memorial House of numerous compliance deficiencies. Kawabe Memorial House did not complete their initial response until April 2019, and did not resolve the non-compliance until May 2019, a full year after the initial findings were reported to the Organization. HUD withheld funding for the months September 2018 through May 2019, and all funds were released in June 2019. Effect: The result of the finding is that Kawabe Memorial House did not receive HUD funding for the first five months of 2019, and was out of compliance with its contract for that period. Cause: Under the prior management team, HUD guidelines and regulations were not followed with respect to tenant eligibility, subsidy processing and rent increase notices, among other actions. Recommendation: We recommend the Project implement procedures to ensure compliance with HUD guidelines and regulations. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-004 Special Tests & Provisions - HUD Enforcement Actions CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-004 is a repeat of Finding 2018-006. Finding: Kawabe Memorial House did not comply with the terms and requirements of their Housing Assistance Payments (HAP) contract in 2018 related to resolving compliance deficiencies identified by HUD in a timely manner. Criteria: The Project shall comply with HUD guidelines and regulations regarding the acceptance and use of Housing Assistance Payments (HAP). Sample Size and Population: Sampling was not applicable to this finding. Condition and context: HUD performed a ?Management and Occupancy Review? during May 2018 and notified Kawabe Memorial House of numerous compliance deficiencies. Kawabe Memorial House did not complete their initial response until April 2019, and did not resolve the non-compliance until May 2019, a full year after the initial findings were reported to the Organization. HUD withheld funding for the months September 2018 through May 2019, and all funds were released in June 2019. Effect: The result of the finding is that Kawabe Memorial House did not receive HUD funding for the first five months of 2019, and was out of compliance with its contract for that period. Cause: Under the prior management team, HUD guidelines and regulations were not followed with respect to tenant eligibility, subsidy processing and rent increase notices, among other actions. Recommendation: We recommend the Project implement procedures to ensure compliance with HUD guidelines and regulations. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. The prior executive director and office manager did not respond in a timely manner to HUD or its contract administrators in a timely manner. We understand the auditors' finding and severity of this matter. We have taken steps to contact HUD Administrative Staff and are in the process of responding and resolving all open matters.
2018-006
2019-005 Procurement and Suspension and Debarment CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-005 is a repeat of Finding 2018-007. Finding: Kawabe Memorial House did not have a procurement policy in place during a portion of 2019 that was in compliance with federal procurement guidance. Criteria: Non-Federal entities, other than States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: Kawabe Memorial House did not adopt a procurement policy for goods and service providers until January 24, 2019. The procurement policy adopted is not in compliance with current federal standards. Effect: The result of the finding is that Kawabe Memorial House was not in compliance with federal procurement standards. Cause: Lack of adequate training on current federal compliance requirements caused delayed implementation of procurement standards. Recommendation: Revise current procurement procedures to be in compliance with required standards. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-005 Procurement and Suspension and Debarment CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; 14.195 U.S. Department of Housing and Urban Development ? Section 8 Housing Assistance Payments Identification as a Repeat Finding: Finding 2019-005 is a repeat of Finding 2018-007. Finding: Kawabe Memorial House did not have a procurement policy in place during a portion of 2019 that was in compliance with federal procurement guidance. Criteria: Non-Federal entities, other than States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: Kawabe Memorial House did not adopt a procurement policy for goods and service providers until January 24, 2019. The procurement policy adopted is not in compliance with current federal standards. Effect: The result of the finding is that Kawabe Memorial House was not in compliance with federal procurement standards. Cause: Lack of adequate training on current federal compliance requirements caused delayed implementation of procurement standards. Recommendation: Revise current procurement procedures to be in compliance with required standards. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding and note that the prior executive director did adopt a procurement policy on January 24, 2019. The new executive director will work with the Board to review and modify the procurement policy, if necessary, to fully comply with federal standards.
2018-007
2019-006 Reporting ? IRS Payroll Tax Deposits and Retirement Plan Deferrals Finding: The Kawabe Memorial House did not timely file or pay federal payroll taxes as required, and did not timely deposit elective employee retirement plan contributions. Criteria: The Internal Revenue Service requires all payroll tax returns and federal tax withholdings to be filed and paid in a timely manner. The Department of Labor requires that all retirement plan participants? deferrals be deposited within a maximum of 15 business days following the payroll date. Condition and context: The Organization is a semiweekly schedule depositor with the IRS, and therefore must deposit taxes within one week of the payroll period pay dates. The Organization paid payroll taxes for pay dates between June 2018 and May 2019 between one and five months late. Penalties and interest on these late payments totaled $11,267 in 2019. The Organization did not pay employee elective deferral retirement contributions for the months of August 2018 through May 2019 until June 4, 2019 for a total of $44,988. The Organization did not pay employee elective deferral retirement contributions for the months of June 2019 through December 2019 until 2020. Sample Size and Population: Sampling was not applicable to this finding. Effect: The late filing and payments are not in accordance with regulations provided by the Internal Revenue Service and the Department of Labor and resulted in fines and penalties for failure to file timely. Cause: Kawabe Memorial House did not instruct the payroll service provider to file the payroll tax return or remit payroll taxes or retirement contributions in a timely manner. Recommendation: Implement a due date monitoring system to ensure that future reports are filed, and taxes and deferral contributions are paid on a timely basis and in accordance with applicable requirements. Questioned Costs: None. Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-006 Reporting ? IRS Payroll Tax Deposits and Retirement Plan Deferrals Finding: The Kawabe Memorial House did not timely file or pay federal payroll taxes as required, and did not timely deposit elective employee retirement plan contributions. Criteria: The Internal Revenue Service requires all payroll tax returns and federal tax withholdings to be filed and paid in a timely manner. The Department of Labor requires that all retirement plan participants? deferrals be deposited within a maximum of 15 business days following the payroll date. Condition and context: The Organization is a semiweekly schedule depositor with the IRS, and therefore must deposit taxes within one week of the payroll period pay dates. The Organization paid payroll taxes for pay dates between June 2018 and May 2019 between one and five months late. Penalties and interest on these late payments totaled $11,267 in 2019. The Organization did not pay employee elective deferral retirement contributions for the months of August 2018 through May 2019 until June 4, 2019 for a total of $44,988. The Organization did not pay employee elective deferral retirement contributions for the months of June 2019 through December 2019 until 2020. Sample Size and Population: Sampling was not applicable to this finding. Effect: The late filing and payments are not in accordance with regulations provided by the Internal Revenue Service and the Department of Labor and resulted in fines and penalties for failure to file timely. Cause: Kawabe Memorial House did not instruct the payroll service provider to file the payroll tax return or remit payroll taxes or retirement contributions in a timely manner. Recommendation: Implement a due date monitoring system to ensure that future reports are filed, and taxes and deferral contributions are paid on a timely basis and in accordance with applicable requirements. Questioned Costs: None. Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. The organization did not timely remit IRS Payroll tax deposits or retirement plan deferrals as required. We have taken steps to hire knowledgeable accounting staff and are actively working to make all required deposits and resolve all open matters.
2018-010
2019-007 Special Tests and Provisions ? Reimbursements of Advances CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Finding: Kawabe Memorial House entered into loan agreements with a related party without prior approval from HUD, in violation of their regulatory agreement. Criteria: Under the HUD insured loan regulatory agreement, the Organization is required to obtain pre-approval from HUD for any interest-bearing loans obtained from other parties. Additionally, repayments of such loans or advances must be made only from surplus cash. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: Kawabe Memorial House obtained two operating loss loans from Kawabe Memorial House Foundation, a related party, during 2019, for a total of $191,639. HUD was not notified of these loans prior to their execution. Further, in December 2019, the Organization repaid one loan for $70,000 without consideration of surplus cash or obtaining HUD approval for the repayment. Cause: The staff of the Organization have not received adequate training in federal compliance requirements associated with their funding sources. Effect: The result is that Kawabe Memorial House was not in compliance with the HUD regulatory agreement at the end of 2019. Recommendation: Consider hiring staff that are very experienced and knowledgeable regarding HUD compliance requirements. Implement a training plan for management and staff to receive ongoing continuing education related to federal award compliance and specifically HUD compliance requirements. Questioned Costs: $ 70,000 Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-007 Special Tests and Provisions ? Reimbursements of Advances CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Finding: Kawabe Memorial House entered into loan agreements with a related party without prior approval from HUD, in violation of their regulatory agreement. Criteria: Under the HUD insured loan regulatory agreement, the Organization is required to obtain pre-approval from HUD for any interest-bearing loans obtained from other parties. Additionally, repayments of such loans or advances must be made only from surplus cash. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: Kawabe Memorial House obtained two operating loss loans from Kawabe Memorial House Foundation, a related party, during 2019, for a total of $191,639. HUD was not notified of these loans prior to their execution. Further, in December 2019, the Organization repaid one loan for $70,000 without consideration of surplus cash or obtaining HUD approval for the repayment. Cause: The staff of the Organization have not received adequate training in federal compliance requirements associated with their funding sources. Effect: The result is that Kawabe Memorial House was not in compliance with the HUD regulatory agreement at the end of 2019. Recommendation: Consider hiring staff that are very experienced and knowledgeable regarding HUD compliance requirements. Implement a training plan for management and staff to receive ongoing continuing education related to federal award compliance and specifically HUD compliance requirements. Questioned Costs: $ 70,000 Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. We were not aware of the requirement to perform a surplus cash computation or obtain HUD approval prior to reimbursement of operating advances. We are putting in place training and procedures to prevent similar transactions in the future.
2019-008 Special Tests and Provisions ? Security Deposits CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Finding: Security deposit funds were transferred into operating funds during 2019 to fund operating shortfalls, in violation of the Organization?s HUD regulatory agreement. Criteria: Under the HUD regulatory agreement, security deposits shall be kept separate from all other funds of the project in an amount which at all times shall equal or exceed the aggregate of all outstanding obligations under said security deposit account. The use of tenant security deposits for project operations is prohibited unless the tenant has forfeited the deposit. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: All security deposit funds were transferred and comingled with operating funds in April 2019 and were not repaid back into the segregated security deposit fund until June 2019. Additionally, the Organization did not maintain adequate records to support the security deposit obligation to tenants throughout 2019. Cause: The staff of the Organization have not received adequate training in federal compliance requirements associated with their funding sources. In addition, there are not adequate internal controls related to reconciling the security deposit account to underlying tenant deposit listing during 2019 on a monthly basis. Effect: The Organization was in violation of their regulatory agreement in 2019, and tenant security deposits were not held in trust for the entirety of the period. There is potential the Organization would not have adequate funds to pay security deposits due to tenants upon their move-out date during the year. Recommendation: Consider hiring staff that are very experienced and knowledgeable regarding HUD compliance requirements. Implement a training plan for management and staff to receive ongoing continuing education related to federal award compliance and specifically HUD compliance requirements. We also recommend reconciling the security deposit account to underlying tenant deposits on a monthly basis, to ensure it is always sufficient to cover the obligation to tenants. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
Show full finding ▾Hide full finding ▴2019-008 Special Tests and Provisions ? Security Deposits CFDA Numbers and Name of Federal Program: 14.155 U.S. Department of Housing and Urban Development ? Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Finding: Security deposit funds were transferred into operating funds during 2019 to fund operating shortfalls, in violation of the Organization?s HUD regulatory agreement. Criteria: Under the HUD regulatory agreement, security deposits shall be kept separate from all other funds of the project in an amount which at all times shall equal or exceed the aggregate of all outstanding obligations under said security deposit account. The use of tenant security deposits for project operations is prohibited unless the tenant has forfeited the deposit. Sample Size and Population: Sampling was not applicable to this finding. Condition and context: All security deposit funds were transferred and comingled with operating funds in April 2019 and were not repaid back into the segregated security deposit fund until June 2019. Additionally, the Organization did not maintain adequate records to support the security deposit obligation to tenants throughout 2019. Cause: The staff of the Organization have not received adequate training in federal compliance requirements associated with their funding sources. In addition, there are not adequate internal controls related to reconciling the security deposit account to underlying tenant deposit listing during 2019 on a monthly basis. Effect: The Organization was in violation of their regulatory agreement in 2019, and tenant security deposits were not held in trust for the entirety of the period. There is potential the Organization would not have adequate funds to pay security deposits due to tenants upon their move-out date during the year. Recommendation: Consider hiring staff that are very experienced and knowledgeable regarding HUD compliance requirements. Implement a training plan for management and staff to receive ongoing continuing education related to federal award compliance and specifically HUD compliance requirements. We also recommend reconciling the security deposit account to underlying tenant deposits on a monthly basis, to ensure it is always sufficient to cover the obligation to tenants. Questioned Costs: $ N/A Management Response: Auditee agrees with the finding and will implement procedures to correct the finding. Contact Person: Matsuo Kohler, Co-Executive Director
We agree with this finding. We have implemented training and procedures to prevent the tenant security deposits from being used to fund general operating costs in the future.
FAC accepted this audit on September 19, 2019 — management decision was due March 19, 2020.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-001
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-002
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-003
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-004
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-005
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-006
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-007
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-008
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
2017-009
GSA_MIGRATION
Show full finding ▾Hide full finding ▴FAC accepted this audit on May 21, 2019 — management decision was due November 21, 2019.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
Track your findings and corrective action plans across audit cycles.
Start tracking findings →Monitor subrecipient audit findings and filing records.
Start monitoring →© 2026 Single Audit Intelligence. All data is public domain.
