Implement adequate procedures and controls to ensure that it (1) uses project funds for reasonable operating expenses or necessary repairs of the project, (2) obtains HUD approval before disposing of the project’s assets, (3) receives market value for the sale of licensed beds, (4) obtains HUD approval for the entities selected to manage the project before entering into management agent agreements with the entities, (5) properly completes Medicaid applications, and (6) makes timely mortgage payments to prevent a $1,591,849 claim to HUD on the mortgage.
Publication Report
2017-CH-1009 | September 30, 2017
The Owner and Management Agents Lacked Adequate Controls Over the Operation of Mary Scott Nursing Center, Dayton, OH
We audited Mary Scott Nursing Center (project) based on our analysis of risk factors related to the U.S. Department of Housing and Urban Development’s (HUD) multifamily nursing projects in Region 5’s jurisdiction (States of Illinois, Indiana, Michigan,… moreRelated Recommendations
Housing
- Status2017-CH-1009-001-AOpenClosedClosed on April 08, 2020$542,443.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Reimburse the project from nonproject funds for the $542,443 in disbursements from the project’s general operating fund account that was not used for reasonable operating expenses or necessary repairs of the project.
- Status2017-CH-1009-001-BOpenClosedClosed on December 08, 2020$384,772.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Reimburse the State from nonproject funds for the additional $384,772 in Medicaid overpayments.
- Status2017-CH-1009-001-COpenClosedClosed on April 08, 2020$189,524.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Support or reimburse the project from nonproject funds for the $189,524, as appropriate, in disbursements from the project’s general operating fund account without sufficient documentation showing that the disbursements were for reasonable operating expenses of the project.
- Status2017-CH-1009-001-DOpenClosedClosed on April 08, 2020$20,000.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Support or reimburse the project from nonproject funds for the $20,000 value of the project’s van, which was transferred without sufficient documentation showing that the transfer was for reasonable operating expenses.
- Status2017-CH-1009-001-EOpenClosedClosed on May 01, 2020$51,261.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Support or reimburse the project from nonproject funds for the $51,261, as appropriated, in credit card purchases without sufficient documentation showing that the purchases were for reasonable operating expenses or necessary repairs of the project.
- Status2017-CH-1009-001-FOpenClosedClosed on May 01, 2020$2,020.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Reimburse the project from nonproject funds for the $2,020 in credit card purchases that was not used for reasonable operating expenses of the project.
- Status2017-CH-1009-001-GOpenClosedClosed on May 01, 2020$5,302.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Reimburse the project from nonproject funds for the $5,302 in petty cash expenditures that was not used for reasonable operating expenses of the project.
- Status2017-CH-1009-001-HOpenClosedClosed on August 03, 2020$390,583.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Pay the project from nonproject funds for the $390,583 in uncollected rental revenue.
Determine the market value of the operating rights for the 10 licensed beds sold in April 2015. If the licensed beds were sold for less than market value, the owner should reimburse the project from nonproject funds for the difference between the market value and the $150,000 sales price of the operating rights for the 10 licensed beds.
Work with the project’s owner and Greystone for the owner to develop an action plan to bring the owner current on the project’s mortgage, reserve for replacements, and taxes and insurance to prevent a claim to HUD on the mortgage.