Finding 586429 (2023-002)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Rannie Webster Foundation’s Regulatory Agreement with HUD requires the Foundation to maintain a debt service coverage ratio of 1.0. Condition: Rannie Webster Foundation’s debt service coverage ratio was calculated as below 1.0. Questioned costs: None Context: Rannie Webster Foundation’s debt service coverage ratio was calculated as below the requirement of 1.0. Cause: Rannie Webster Foundation experienced higher costs as a result of overall economic conditions and higher costs on contracted nursing services in the wake of healthcare hiring challenges. Effect: This may be considered a project operating deficiency by HUD. HUD may provide the Foundation with written notice that the Foundation must select and engage (at the Foundation’s expense), within ten business days of such notice, the services of a management consultant. HUD’s decision to require or not require the engagement of a consultant is within HUD’s sole discretion. Repeat finding: This is a repeat finding and was reported as finding 2022-02 in the prior year. Recommendation: Management should evaluate and consider cost-cutting measures or strategies to improve the financial results. Views of responsible officials: Management is in agreement with the finding.