Finding Text
Criteria: Per the Compliance Requirement, “Owner shall not, without the prior written consent of HUD, convey, assign, transfer, dispose of, or encumber any of the mortgaged property or permit the conveyance, transfer, or encumbrance of such property.
Condition: During our testing of Note Payable, the Corporation cannot provide a copy of the Payroll Protection Program Loan of $44,235 with PNC Bank.
Cause: Due to the turnover of the Management Agent-Owner, there were no procedures to monitor the filing and/or storage of promissory notes.
Effect: The testing to review additional; encumbrances that may have been made without HUD approval could not be performed.
Recommendation: We recommend the Corporation contact PNC Bank to obtain a copy of the PPP loan promissory note for $44,235.
Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.