Finding Text
S3800-010 Finding Reference Number – 2025-004 S3800-011 Title and CFDA Number of Federal Program – Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 S3800-015 Type of Finding – Federal Award Finding; Other Matters S3800-016 Finding Resolution Status – Resolved S3800-017 Information on Universe Population Size – N/A S3800-018 Sample Size Information – N/A S3800-019 Identification of Repeat Finding and Finding Reference Number – N/A S3800-020 Criteria – Per the regulatory agreement Section 6(e), the Organization may not make any distribution of assets except surplus cash and except for conditions outlined in the agreement. S3800-030 Statement of Condition – During our audit, we noted Cheney Care Community advanced funds to a related party in the amount of $7,328. S3800-032 Cause – During the year ended September 30, 2025, the related party needed funds to meet operating expenditures. S3800-033 Effect or Potential Effect – The Organization has less funds available for operations. S3800-035 Auditor Non-Compliance Code – G (Unauthorized loans from project funds) S3800-037 FHA/Contract Number – 171-22029 S3800-038 Questioned Costs – $7,328 S3800-040 Questioned Costs – $7,328 S3800-045 Reporting Views of Responsible Officials – Cheney Care Community is in agreement with the findings, and the recommendations will be implemented. S3800-050 Context – During the year ended September 30, 2025, Cheney Care Community transferred funds to Sessions Village 202, a related party through common board of directors and another HUD project, to cover operating obligations. S3800-080 Recommendation – We recommend the related party reimburse Cheney Care Community. We also recommend management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure disbursements are not made outside of HUD’s allowable regulations going forward. S3800-090 Auditor’s Summary of Auditee Comments on the Findings and Recommendations - The related party reimbursed Cheney Care Community. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure HUD requirements are followed going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors. S3800-130 Response Indicator – Agree S3800-140 Completion Date – December 10, 2025 S3800-150 Response – The related party reimbursed Cheney Care Community. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure HUD requirements are followed going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.