Finding 1150459 (2024-003)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-08-20
Audit: 364597
Organization: Henry C. Nevins Home, Inc. (MA)

AI Summary

  • Core Issue: The Organization is holding cash over federally insured limits in banks that do not meet HUD guidelines.
  • Impacted Requirements: HUD requires cash to be in institutions with minimum GNMA ratings when balances exceed insurance limits.
  • Recommended Follow-up: Transfer funds to a compliant financial institution to align with HUD guidelines.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 232 Mortgage Insurance for Nursing Homes and Section 241(a) Supplemental Loan Insurance Multifamily Rental Housing Assistance Listing Number: 14.129 and 14.151 Award Period: January 1, 2024 through December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: HUD guidelines require Project cash to be maintained in financial institutions which meet minimum GNMA ratings when balances exceed federal insurance limits. Condition: The Organization maintains cash balances in excess of federally insured limits in financial institutions that do not meet HUD guidelines. Questioned costs: None Context: The cash balance as of December 31, 2024 was approximately $740,000, held in two financial institutions, which exceeded federal insurance limits by approximately $470,000. Cause:. As the Organization is a community based nonprofit organization, management considers supporting a local bank to be a worthwhile endeavor. Effect: No negative effect was discovered during the audit. Repeat Finding: No. Recommendation: The Organization should transfer all funds to a financial institution that meets HUD guidelines. Views of responsible officials: Nevins moved to this financial institution with the first HUD loan in 2015. This is a local bank that actively supports Nevin’s mission in the community. Given Nevin’s current financial struggles, the balance in the bank seldom exceeds the $250,000 threshold.

Categories

HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 574014 2024-002
    Significant Deficiency
  • 574015 2024-002
    Significant Deficiency
  • 574016 2024-003
    Significant Deficiency
  • 574017 2024-003
    Significant Deficiency
  • 1150456 2024-002
    Significant Deficiency
  • 1150457 2024-002
    Significant Deficiency
  • 1150458 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.129 Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $5.25M
14.151 Supplemental Loan Insurance Multifamily Rental Housing $4.51M