Finding 43910 (2022-002)

- Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2023-09-28

Audit: 49539

Organization: Living Independently for the Elderly, INC (NY)

Auditor: Hmm CPAS LLP

AI Summary

Core Issue: LIFE, Inc. has an unauthorized receivable balance from a non-HUD party that exceeds the allowed amount since July 2001.
Impacted Requirements: This violates section 3-5 of the Consolidated HUD Audit Guide, which mandates that project funds should not be used for non-entity purposes without HUD authorization.
Recommended Follow-Up: LIFE, Inc. should reduce the receivable balance to the July 2001 level, as agreed upon in their repayment plan.

Finding Text

Finding 2022-002 - Unauthorized Receivable Balance Criteria: LIFE, Inc. has an unauthorized receivable balance due from a non-HUD related party greater than the balance at closing in July 2001, in violation of section 3-5 of the Consolidated HUD Audit Guide. Condition: Procedures must be in place to ensure project funds are not used for non-entity purposes unless expressly authorized by HUD. Cause: The related party is in financial hardship and LIFE, Inc. had loaned monies to this non-HUD related party greater than the balance allowed. Effect: The payments put a strain on cash flow. Compliance Code: Z Recommendation: The auditee bring the receivable balance back to the July 2001 level at closing. Views of Responsible Officials and Planned Corrective Actions: LIFE, Inc. agrees with the finding and recommendation. LIFE, Inc. entered into a repayment plan to bring the receivable balance back to the July 2002 level at closing. 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 HUD mortgage and escrow balances.

Corrective Action Plan

CORRECTIVE ACTION PLAN Name of auditee Living Independently for the Elderly HUD auditee identification number: 012-43235 Name of audit firm: HMM, CPAs LLP Period covered by the audit: December 31, 2022 CAP prepared by: Anastasios Markopoulos Phone: (914) 739-6700 Ext. 1227 2 Finding 2022-002 a. Comments on the Finding and Each Recommendation. LIFE, Inc. agrees with the finding. LIFE, Inc. also agrees with the recommendation, please see below for action taken. b. Action Taken on the Finding. LIFE, Inc. entered into a repayment plan to bring the receivable balance back to the July 2001 level at closing. 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, lnc.'s HUD mortgage and escrow balances.

Other Findings in this Audit

43909 2022-001

- Repeat
43911 2022-003

- Repeat
620351 2022-001

- Repeat
620352 2022-002

- Repeat
620353 2022-003

- Repeat

Programs in Audit

ALN	Program Name	Expenditures
14.129	Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities	$7.05M