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.