Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Section 232 Mortgage Insurance for Nursing Homes and Section 241(a) Supplemental Loan Insurance Multifamily Rental Housing
Assistance Listing Number: 14.129 and 14.151
Award Period: January 1, 2024 through December 31, 2024
Type of Finding:
- Significant Deficiency 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 financial institutions that do not meet HUD guidelines.
Questioned costs: None
Context: The cash balance as of December 31, 2024 was approximately $740,000, held in two financial institutions, which exceeded federal insurance limits by approximately $470,000.
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: No.
Recommendation: The Organization should transfer all funds to a financial institution that meets HUD guidelines.
Views of responsible officials: Nevins moved to this financial institution with the first HUD loan in 2015. This is a local bank that actively supports Nevin’s mission in the community. Given Nevin’s current financial struggles, the balance in the bank seldom exceeds the $250,000 threshold.