Audit 323094

FY End

2023-12-31

Total Expended

$13.74M

Findings

2

Programs

1

Organization: Rmc Tooele Property, LLC (UT)

Year: 2023 Accepted: 2024-09-30

Auditor: Wsrp

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
500323	2023-001	-	Yes	A
1076765	2023-001	-	Yes	A

ALN	Program	Spent	Major	Findings
14.129	Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities	$13.74M	Yes	1

Contacts

Name	Title	Type
EGHLQMFDMVV6	Nate Bangerter	Auditee
8013974000	Tyler Curtis	Auditor
No contacts on file

Notes to SEFA

Title: Note 1 – Basis of Presentation Accounting Policies: HUD will not allow entity to engage in any other purpose so it is very easy to inventory the program, Insured Mortgage, from year to year. Balances are pulled directly from GL account specifically used to account for the insured financing on an accrual basis. Management is very experienced in these areas and the methods are unchanged from the prior year. De Minimis Rate Used: Y Rate Explanation: Used deminimis rate as needed The accompanying schedule of expenditures of federal awards includes the federal grant activity of RMC Tooele Property, LLC, HUD Project No. 105-43073, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Management has elected to use the 10% de Minimis indirect cost rate for certain costs.

Title: Note 2 – Loans Outstanding Accounting Policies: HUD will not allow entity to engage in any other purpose so it is very easy to inventory the program, Insured Mortgage, from year to year. Balances are pulled directly from GL account specifically used to account for the insured financing on an accrual basis. Management is very experienced in these areas and the methods are unchanged from the prior year. De Minimis Rate Used: Y Rate Explanation: Used deminimis rate as needed RMC Tooele Property, LLC, had the following loan balances outstanding at December 31, 2023: Section 223(f) insured Loan by the Department of Housing and Urban Development in the amount of $13,737,087. (See Note 4 – Capital Advance) The loan balance outstanding is included in the federal expenditures presented in the schedule. Per Title 2 U.S. Code of Federal Awards paragraph 200.502 (Uniform Guidance), for loan guarantee programs the amount of federal awards expended based on the beginning of the period balance of loans from previous years for which the Federal government imposes continuing compliance requirements. So, the amount of federal awards expended for the loan guarantee program listed in this schedule will differ from the balance reflected on the balance sheet by the amount of principal paid during the reporting period. The outstanding loan balance at period end is $13,535,972.

Finding Details

Finding 2023-001

Management distributed funds before surplus cash was demonstrated at the end of the annual and semi-annual fiscal periods. In accordance with HUD guidelines and requirements regarding the Section 232 Insured Mortgage, distributions may only be made after the end of any annual or semi-annual fiscal period, and when positive surplus cash is demonstrated. Noncompliance with HUD program guidelines. Management did not follow the established policies or HUD regulations because of the timing of when they believed surplus cash was available. We recommend that management review the regulatory agreement of how surplus cash is calculated and timing of when a distribution is allowed. Management should ensure if net positive surplus is calculated it is only distributed at annual or semi-annual intervals. Note there is no questioned costs because management contributed more funds than were disbursed. Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals. Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals.

Finding 2023-001

Management distributed funds before surplus cash was demonstrated at the end of the annual and semi-annual fiscal periods. In accordance with HUD guidelines and requirements regarding the Section 232 Insured Mortgage, distributions may only be made after the end of any annual or semi-annual fiscal period, and when positive surplus cash is demonstrated. Noncompliance with HUD program guidelines. Management did not follow the established policies or HUD regulations because of the timing of when they believed surplus cash was available. We recommend that management review the regulatory agreement of how surplus cash is calculated and timing of when a distribution is allowed. Management should ensure if net positive surplus is calculated it is only distributed at annual or semi-annual intervals. Note there is no questioned costs because management contributed more funds than were disbursed. Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals. Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals.