Finding Text
Special Tests and Provisions; Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 Criteria- In accordance with HUD Handbook 4571.3, Section 202 Supportive Housing for the Elderly, funds may only be used with the approval of HUD. Condition - As of December 31, 2024, management had not repaid $40,239 due to reserve for replacement. Cause - Inadequate cash flow to fund operations and return of funds to reserve for replacement. Effect or Potential Effect - Shiloh Manor, Inc. is not in compliance with the funding requirement of the reserve for replacement. Questioned Costs - None Context - On December 31, 2017, HUD had approved a loan to operations from the reserve for replacement of $40,239 to be repaid upon receipt of the past due subsidy. When the past due subsidy was received the property was unable to repay the loan because of an unexpected increase in vacancies as a result of tenant turnover. Identification as a Repeat Finding - This is a repeat finding (see prior year finding number 2023-001). Recommendation - Management should work with HUD to execute the loan waiver for the delinquent amount of $40,239. Auditor Noncompliance Code: N - Reserve for replacement deposits. Finding Resolution Status: In process. Views of Responsible Officials As of December 31, 2024 management has not repaid $40,239 due to reserve for replacement. The owner and agent met with HUD to discuss the loan repayment. It was determined that the loan payment would be deferred and absorbed into the budget-based increase submitted to HUD and currently under review.