From Les Sparks:
The answer to your question lies in the HOME agreement with the city. For a loan to have a continuing expenditure for UG purposes, it must have ongoing compliance requirements. So, the year of expenditure of the grant, it was reported. After that year, if there are non ongoing requirements, then it is not a Federal expenditure. If the City has no other requirements beyond, paying the loan, it is entirely possible that there is no audit required.
Here is the language from Uniform Guidance to explain.
(b) Loan and loan guarantees (loans). Since the Federal government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section:
(1) Value of new loans made or received during the audit period; plus
(2) Beginning of the audit period balance of loans from previous years for which the Federal government imposes continuing compliance requirements; plus
(3) Any interest subsidy, cash, or administrative cost allowance received.
(c) Loan and loan guarantees (loans) at IHEs (Institutes of Higher Education). When loans are made to students of an IHE but the IHE does not make the loans, then only the value of loans made during the audit period must be considered Federal awards expended in that audit period. The balance of loans for previous audit periods is not included as Federal awards expended because the lender accounts for the prior balances.
(d) Prior loan and loan guarantees (loans). Loans, the proceeds of which were received and expended in prior years, are not considered Federal awards expended under this Part when the Federal statutes, regulations, and the terms and conditions of Federal awards pertaining to such loans impose no continuing compliance requirements other than to repay the loans.
If the agreement says what I think it says the loan would not be an expenditure for Federal awards.
From client:
The requirement of the city / local housing commission is to compute for residual value every year to determine the amount, if any, for the payment of interest. And also if property is sold or converted to condominiums the principal and interest become payable or the property will be foreclosed. The city/housing commission specifically informed us that they do not require single audit reports for loans that has been funded and expended in previous years.
From Les Sparks:
It sounds like there is no federal award for the years after the initial year. So, no single audit.