Finding Text
Information on the Federal Program: Assistance Listing number: 14.129 Program Title: Insurance - Nursing Home, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Agency: United States Department of Housing and Urban Development Finding Year: 2026 Criteria or Specific Requirement: Unauthorized Loans of Project Funds Owners shall not, without written consent of HUD, assign, transfer, dispose of or encumber a personal property of the project, including rents, or pay out any funds except for reasonable operating expenses and necessary repairs. Condition: During 2025, ORG made cash advances approximating $2,675,000 to not-for-profit entities that provide skilled nursing services, which share a common board chair with ORG, which was not authorized by HUD. As of March 31, 2026 the amount outstanding was $1,950,000. HUD approval is still pending. Cause: Funds were advanced without prior written approval from HUD. Effect or Potential Effect: By advancing funds without HUD authorization, there is potential that HUD will not approve the advance and require the funds to be repaid in a manner that was different from what ORG originally planned on. Questioned Costs: N/A. Identification as a Repeat Finding: Yes – Finding 2025-001 Recommendation: ORG should request written approval from HUD on the allowability of the $2,675,000 advances to other not-for-profit entities that provide skilled nursing services. In the event that HUD does not approve the advances, ORG should seek repayment of such advances. Views of Responsible Officials and Planned Corrective Actions: See attached for management’s correction action plan.