Finding Text
Information on the Federal Program:
Assistance Listing number: 14.129
Program Title: Insurance - Nursing Home, Intermediate Care Facilities, Board and
Care Homes, and Assisted Living Facilities
Agency: United States Department of Housing and Urban Development
Finding Year: 2025
Criteria or specific requirement: Unauthorized loans of project funds. Owners shall not,
without written consent of HUD, assign, transfer, dispose of or encumber a personal
property of the project, including rents, or pay out any funds except for reasonable
operating expenses and necessary repairs.
Condition: During 2025, ORG made cash advances approximating $2,675,000 to notfor-
profit entities that provide skilled nursing services not authorized by HUD.
Cause: Funds were advanced without prior written approval.
Effect or potential effect: By advancing funds without U.S. HUD authorization, there is
potential that U.S. HUD will not approve the advance and require the funds to be
repaid in a manner that was different from what ORG originally planned on.
Questioned costs: $2,675,000 of advanced project funds.
Identification as a repeat finding: Not applicable
Recommendation: ORG should request written approval from U.S. HUD on the
allowability of the $2,675,000 advances to other not-for-profit entities that provide
skilled nursing services. In the event that HUD does not approve the advance, ORG
should seek repayment of such advances.
Views of responsible officials and planned corrective actions: See attached
management’s correction action plan.