Finding Text
S3800-010 Finding reference number: 2024-001
S3800-011 Title and CFDA Flexible Subsidy Loan: 14.164
S3800-015 Type of Finding: FA
S3800-016 Finding resolution status: In process
S3800-019 Identification of repeat finding: 2023-001
S3800-020 Criteria: The Flexible Subsidy Loan "Residual Receipts Note" clause 3(a) cites that the entire principal together with interest is immediately due and payable when the HUD Section 202 mortgage is paid off.
S3800-030 Statement of Condition: During our audit for the year ended December 31, 2021, we inquired and requested documentation regarding the repayment status of the Flexible Subsidy Loan from the Agency's officers and
from its management company. The Agency did not have documentation regarding the mortgage status of the Flexible Subsidy Loan available since the HUD Section 202 mortgage was paid off in November 2016.
S3800-032 Cause: The Agency is waiting for a response from HUD as to their inquiry regarding the repayment of the Flexible Subsidy Loan.
S3800-033 Effect of Potential Effect: Based on the literal terms of the Flexible Subsidy Loan, the Agency appears to be in default as it has not established repayment with HUD.
S3800-035 Auditor non-compliance code: S
S3800-040 Amount of questioned costs: $0
S3800-045 Reporting Views of Responsible Officials: We continue to follow up, as we diligently have over many recent months, starting in 2008. Most recently, via an attorney, who, like Pilgrim Towers, has not been able to elicit any response from HUD to resolve this matter.
S3800-037 FHA/Contract number: CT26M000251
S3800-038 Questioned Costs: $0
S3800-050 Context: It has been brought to the Agency's attention that the repayment of the HUD Section 202 mortgage that they would need to contact their HUD field representative regarding repayment of the Flexible Subsidy Loan.
S3800-080 Recommendation: We recommend that the Agency follow up with its HUD field representative to determine the next steps regarding the repayment terms of the Flexible Subsidy Loan.
S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: We recommend that the Agency follow up with its HUD field representative to determine the next steps regarding the repayment terms of the Flexible Subsidy Loan.
S3800-130 Response Indicator: A
S3800-140 Completion date of proposed recommendation: December 31, 2025
S3800-150 Response: We have submitted a Flexible Subsidy Deferal Request package to HUD's Boston Multifamily Asset management division in October 2024, and have sent follow up requests in December 2024 and Febraury 2025. We are currently awaiting
final approval of this request from HUD.