FAC Explorer

Audit 178618

FY End
2022-09-30
Total Expended
$11.23M
Findings
4
Programs
1
Organization: Elko Ruby Vista, LLC (IL)
Year: 2022 Accepted: 2023-01-24
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
194841 2022-001 - Yes AF
194842 2022-002 - Yes N
771283 2022-001 - Yes AF
771284 2022-002 - Yes N

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $11.23M Yes 2

Contacts

Name Title Type
G3VVCLRQYTJ1 Ronald J. Wilson Auditee
3093431550 Michelle Vancil Auditor
No contacts on file

Notes to SEFA

Title: Note 3. Loans Outstanding Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Elko Ruby Vista, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. As of September 30, 2022, Elko Ruby Vista, LLC had a HUD-insured mortgage loan balance outstanding of $10,964,860.
Title: Note 4. Noncash Assistance Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Elko Ruby Vista, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. There was no noncash federal assistance received by Elko Ruby Vista, LLC during the year.
Title: Note 5. Insurance Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Elko Ruby Vista, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. The Organization maintains property and liability insurance which management believes is sufficient to meets its needs. None of the insurance is directly funded by federal awards.
Title: Note 6. Subrecipients Accounting Policies: Note 1. Basis of Presentation: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Elko Ruby Vista, LLC (the Organization) under programs of the federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Note 2. Summary of Significant Accounting Policies: The amount reported on the Schedule is reported on the accrual basis of accounting and is the HUD-insured mortgage loan balance outstanding as of October 1, 2021. De Minimis Rate Used: N Rate Explanation: The Organization has not yet elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. The Organization did not pass-through any federal awards to subrecipients during the year ended September 30, 2022.

Finding Details

Finding 2022-001
Identifying Number: 2022-001 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 4(c): ?Owners shall not without the prior written approval of the Secretary [of HUD]: remodel, reconstruct, or demolish any part of the mortgaged property or subtract from any real or personal property of the project? and also specifies in section B of the Lean Rider ?Certain matters requiring approval of the secretary (of HUD)? item 2(k) ?Use of the mortgaged property for any purpose other than the Approved Use? in which ?Approved Use? is defined per section J(i) of the Lean Rider ?as a 112-bed skilled nursing and 35-bed assisted living facility.? Approved use was subsequently amended by HUD to allow an addition of 34 skilled nursing beds. Condition: The Organization did not receive HUD approval prior to starting a construction project to add an addition completed in May 2014, which encompasses 22 additional assisted living beds. The costs and payment of the portion of the completed project that has not been approved totaled $2,501,965, which is included as a liability in the advance from member. Cause: Construction of the addition was started and the number of beds was increased before HUD approval was received. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The construction project and bed change population was tested 100%, therefore was statistically valid. This instance is isolated to this one construction and bed change project. Repeat finding: This finding is a repeat finding (2021-001, 2020-001, 2019-001, 2018-001, 2017-002, 2016-001, 2015-001, 2014-001 and 2013-1). Recommendation: Procedures should be implemented and placed in service to ensure HUD approval, for which all conditions can be met, is obtained before any construction is started on the mortgaged property as well as any bed addition. The Organization should also obtain approval after-the-fact for the specific construction project and bed addition noted above. Views of Responsible Officials: Management disagrees with finding 2022-001.
Finding 2022-002
Identifying Number: 2022-002 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 5: "The Mortgagor agrees to deposit in a residual receipts fund any residual receipts realized from the operation of the mortgaged property. No distribution from such fund shall be made without the prior written approval of the Secretary. Any distribution from such fund, which the party receiving such distribution is not entitled to retain hereunder, shall be held in trust separate and apart from any other funds." Condition: The Organization calculated surplus cash of $6,186 as of September 30, 2019. This amount was not deposited into a separate residual receipts fund account. The Organization calculated surplus cash of $20,565 as of September 30, 2020, which includes the undeposited amount from September 30, 2019. The Organization has not deposited this amount into a separate residual receipts fund account within 90 days of the fiscal year-end. Cause: Required deposit of residual receipts in a separate residual receipts fund within 90 days of year end was not made. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The population was tested 100%, therefore was statistically valid. Repeat finding: This finding is a repeat finding (2021-002, 2020-002). Recommendation: Procedures should be implemented and placed in service to ensure residual receipts are deposited into a separate fund within 90 days of year-end. The Organization should deposit in a separate residual receipts fund residual receipts of $20,565 realized from the operation of the mortgaged property in the prior year. Views of Responsible Officials: Management agrees with finding 2022-002.
Finding 2022-001
Identifying Number: 2022-001 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities. Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 4(c): ?Owners shall not without the prior written approval of the Secretary [of HUD]: remodel, reconstruct, or demolish any part of the mortgaged property or subtract from any real or personal property of the project? and also specifies in section B of the Lean Rider ?Certain matters requiring approval of the secretary (of HUD)? item 2(k) ?Use of the mortgaged property for any purpose other than the Approved Use? in which ?Approved Use? is defined per section J(i) of the Lean Rider ?as a 112-bed skilled nursing and 35-bed assisted living facility.? Approved use was subsequently amended by HUD to allow an addition of 34 skilled nursing beds. Condition: The Organization did not receive HUD approval prior to starting a construction project to add an addition completed in May 2014, which encompasses 22 additional assisted living beds. The costs and payment of the portion of the completed project that has not been approved totaled $2,501,965, which is included as a liability in the advance from member. Cause: Construction of the addition was started and the number of beds was increased before HUD approval was received. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The construction project and bed change population was tested 100%, therefore was statistically valid. This instance is isolated to this one construction and bed change project. Repeat finding: This finding is a repeat finding (2021-001, 2020-001, 2019-001, 2018-001, 2017-002, 2016-001, 2015-001, 2014-001 and 2013-1). Recommendation: Procedures should be implemented and placed in service to ensure HUD approval, for which all conditions can be met, is obtained before any construction is started on the mortgaged property as well as any bed addition. The Organization should also obtain approval after-the-fact for the specific construction project and bed addition noted above. Views of Responsible Officials: Management disagrees with finding 2022-001.
Finding 2022-002
Identifying Number: 2022-002 Information on the Federal Program: ALN #14.129, U.S. Department of Housing and Urban Development: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Criteria or Specific Requirement: The regulatory agreement (form HUD 92466-E) specifies in Paragraph 5: "The Mortgagor agrees to deposit in a residual receipts fund any residual receipts realized from the operation of the mortgaged property. No distribution from such fund shall be made without the prior written approval of the Secretary. Any distribution from such fund, which the party receiving such distribution is not entitled to retain hereunder, shall be held in trust separate and apart from any other funds." Condition: The Organization calculated surplus cash of $6,186 as of September 30, 2019. This amount was not deposited into a separate residual receipts fund account. The Organization calculated surplus cash of $20,565 as of September 30, 2020, which includes the undeposited amount from September 30, 2019. The Organization has not deposited this amount into a separate residual receipts fund account within 90 days of the fiscal year-end. Cause: Required deposit of residual receipts in a separate residual receipts fund within 90 days of year end was not made. Effect: Noncompliance with the HUD compliance requirements per the regulatory agreement. Questioned Costs: Not applicable. Context: The population was tested 100%, therefore was statistically valid. Repeat finding: This finding is a repeat finding (2021-002, 2020-002). Recommendation: Procedures should be implemented and placed in service to ensure residual receipts are deposited into a separate fund within 90 days of year-end. The Organization should deposit in a separate residual receipts fund residual receipts of $20,565 realized from the operation of the mortgaged property in the prior year. Views of Responsible Officials: Management agrees with finding 2022-002.