Federal Agency: U.S. Department of Housing and Urban Development (HUD)Federal Program: Housing Opportunities for Persons With AIDS (HOPWA)Assistance Listing Number: 14.241Federal Award: [NMH240051], [November 1, 2024 – October 31, 2027] Compliance Requirement: Program Income Known Questions Cost: None Type of Finding: F, G, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Noncompliance related to Federal Awards Statement of Condition During 2025, the Housing Trust received certain repayments of loans originally funded by HOPWA awards. Of this amount, certain amount may have remained unspent or had not been recorded/reconciled in accordance with HUD requirements as of December 31, 2025. Management did not maintain a documented control to identify HOPWA repayment receipts, determine the applicable award requirements, reconcile receipts and expenditures among IDIS, QuickBooks, and the program-income subsidiary record, and document approval of their disposition. Criteria Under 2 CFR 200.307(c), program income earned after a Federal award’s period of performance is subject to Federal requirements only when required by Federal agency regulations or the terms and conditions of the award, and the Federal agency may establish appropriate disposition requirements through closeout. HUD may require HOPWA-funded loan repayments received after the original award period to be recorded as program income. Cause The Housing Trust had not designed and assigned ownership of a formal program-income and grant-closeout control addressing repayments generated from HOPWA-funded loans after the originating award’s period of performance. Effect Program income may have been subject to incorrect or untimely reporting/use, increasing the risk of noncompliance and misstatement of federal expenditures. Known questioned costs were unknown. Recommendation Housing Trust should implement a documented monthly program-income reconciliation and grant-closeout control that identifies the originating award, applicable HUD disposition requirement, IDIS receipt, QBO classification, eligible use, remaining balance, reviewer approval, and resolution of differences. Evidence of HUD determinations for post-period receipts should be retained with the reconciliation. Views of Responsible Officials: SFCHT acknowledges the finding and notes that the New Mexico HOPWA program is the only documented HUD grant that funds mortgages and that many of the processes described in the finding do not apply to the program. Management has established a formal process to identify and track repayments associated with HOPWA-funded loans. Management will maintain a subsidiary program income register that identifies the originating federal award, receipts, applicable HUD disposition requirements, accounting classification, eligible expenditures, and remaining balance. Program income activity will be reconciled monthly among loan-servicing records, QBO, IDIS, and supporting program records. Written HUD determinations regarding post-period repayments will be retained when applicable. Corrective Action Plan Timeline 1. An onsite meeting with HUD HOPWA representatives is scheduled for September 10, 2026, at the Santa Fe offices. During this meeting, policies and procedures, including the program income policy, will be reviewed and formalized, and a HUD determination log will be established. 2. The HOPWA Program Income Register will be implemented, and repayment schedules for HOPWA loans will be documented in the master loan inventory. Implementation date: July 2026. 3. HOPWA program income will be expended before additional HOPWA IDIS reimbursement requests are approved. 4. A historical review of HOPWA loans and funding sources will be completed. Target date: August 2026. 5. QBO, Portfol, Amerinat, and IDIS will be reconciled monthly. Beginning: July 2026 and ongoing. 6. Post-period repayments and related HUD determinations will be reviewed. Target date: September 2026. Designated Employee Responsible for Corrective Action Director of Operations, with assistance from the Accounting Specialist and HOPWA HUD program staff, as applicable.