Finding 1150138 (2024-001)

In accordance with the HUD regulatory agreement, New Community Urban Renewal Corporation may not, without prior written approval, assign, transfer, dispose of, or encumber any personal property of the project, including rent, and shall not disburse or pay out any funds except for usual operating expenses and necessary repairs. New Community Urban Renewal Corporation has unauthorized loans of $1,560,918 to New Community Healthcare, Inc. as of December 31, 2024. The amount due from New Community Healthcare, Inc. predominately dates back prior to 2003 and is believed to be the result of unpaid rents and potentially loans from the New Community Urban Renewal Corporation’s reserve for repairs and replacement. New Community Urban Renewal Corporation is in violation of the HUD regulatory agreement. Identification as Repeat Finding, refer to finding No. 2023-001. We recommend New Community Urban Renewal Corporation continues to regularly monitor its strict compliance with each aspect of the plan of compliance. New Community Urban Renewal Corporation and HUD have agreed to a plan of compliance requiring, among other things, restitution payments of not less than $150,000 per year through 2024. The required restitution payment for 2024 was made. New Community Urban Renewal Corporation is currently in communication with HUD regarding the new repayment proposal. Until such time as the parties agree to new terms, New Community Urban Renewal Corporation’s intention is to continue making payments of not less than $150,000. No questioned costs identified.