Finding Text
Finding 2022-001 - Mortgage Status Criteria: LIFE, Inc. did not pay Mortgage and Escrow payments timely, in violation of section 3-5 of the Consolidated HUD Audit Guide. Condition: Procedures must be in place to ensure that the mortgage and escrow payments are made by the due date. Cause: LIFE, Inc. was operating at a net loss in 2022 and did not have the necessary cash flow to pay the outstanding HUD balances. Effect: The payments were late in 2022 and LIFE, Inc. incurred additional interest expense. Compliance Code: Q Recommendation: The auditee must implement procedures to ensure that the mortgage is paid by the due date. Views of Responsible Officials and Planned Corrective Action: LIFE, Inc. agrees with the finding and recommendation. In May 2023, the Management of Bethel Springvale Nursing Home, Inc. (the Center) closed on the asset purchase agreement and the proceeds were used to payoff all LIFE, Inc.'s HUD mortgage and escrow balances.