Finding Text
2022 ? 001 Federal agency: U.S. Department of Housing and Urban Development Federal program: Section 232 Mortgage Insurance for Nursing Homes Federal Assistance Listing Number: 14.129 Award Period: 2022 Type of Finding: ? Material Weakness in Internal Control Over Compliance ? Other Matters Criteria or specific requirement: HUD guidelines require Project cash to be maintained in financial institutions, which meet minimum GNMA ratings, when balances exceed federal insurance limits. Condition: The Organization maintains cash balances in excess of federally insured limits in a financial institution that does not meet HUD guidelines. Questioned costs: None Context: The cash balance at December 31, 2022 was approximately $2.2 million, held in two financial institutions, which exceeded federal insurance limits by approximately $1.7 million. Cause: As the Organization is a community based nonprofit organization, management considers supporting a local bank to be a worthwhile endeavor. Effect: No negative effect was discovered during the audit. Repeat finding: Yes, prior year finding 2021-001 Recommendation: The Organization should transfer all funds to a financial institution that meets HUD guidelines. Views of responsible officials and planned corrective actions: The Organization is a community based non-profit and considers supporting local businesses, including a bank, a worthwhile business practice. The Organization is currently in the process of reviewing its banking relationships, and looking at other scenarios which would involve transferring funds to another institution.