Finding Text
Department of Housing and Urban Development Federal Financial Assistance Listing #14.128 Section 242 – Mortgage Insurance - Hospitals Reporting Material Weakness in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The Section 242 – Mortgage Insurance - Hospitals Program requires quarterly reports and certain annual reports. For the year ended July 31, 2025, the Organization failed to timely and accurately submit certain reports in accordance with HUD requirements. Cause: The Organization did not follow their internal control policy to ensure the required reports was filed correctly and timely. Effect: Some required reports were not submitted in accordance with loan requirements deadlines and others were submitted with misstatements. Questioned Costs: None reported. Context: There was a total of seven reports required to be submitted for the year ended July 31, 2025. Four were selected for testing. Three were submitted with misstatements regarding a duplicated line on the balance sheet and some slight statistic differences and the fourth was not submitted to HUD by the deadline. Repeat Finding from Prior Years: Yes, Finding 2024-004. Recommendation: We recommend the Organization enhance internal control policies to ensure required reports are filed timely and accurately with documented support for their review and approval. Views of Responsible Officials: Management agrees with the finding.