Las Villas de Magnolia, Inc.’s capital advance balance outstanding as of December 31, 2024, was $5,795,300 and is included in the federal expenditures presented in the schedule.
Condition: Under terms of the HUD regulatory agreement, the Company is required to receive HUD approval on any disbursement from the residual receipts account. The Company did not receive approval for a $2,000 disbursement from the residual receipts account on August 26, 2024. Criteria: The HUD regulatory agreement requires the Company obtain HUD approval for all disbursements from the residual receipt account. Effect: The Company is in violation of its Regulatory Agreement. Questioned Cost: $2,000 Cause: Oversight Recommendation: We recommend the Company deposit $2,000 into the residual receipts account. Further, we recommend the Company review the regulatory agreement to ensure compliance. Auditor’s Comment: On March 31, 2025, the Company deposited $2,000 into the residual receipts account. Finding 2024-001 Cleared.