Audit 17646

Finding # 2022-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157 - Supportive Housing for Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample size information: N/A Criteria: HUD Handbook 4381.5_Rev.2 - Chapter 3 identifies allowed management fees and special fees allowed to be paid. HUD allows a management fee not to exceed $81 PUPM. Statement of Condition: Management fees paid to the management agent exceed the maximum allowed by HUD in the amount of $37,676. In addition, the Management Agent was paid compliance fees in the amount of $10,450, which is not an allowed HUD cost. Cause: The design or operation of control over the calculation and payment of allowed management fees and compliance fees are not sufficient to prevent or detect or correct unallowed payments. Effect or Potential Effect: The Management Agent was overpaid. Auditor Non-Compliance Code: J - Unauthorized Management Fees. Questioned Costs: $48,126 Reporting Views of Responsible Officials: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Context: N/A Recommendations: We recommend that Management refund the overpayments and establish procedures to ensure that the management fees do not exceed the maximum PUPM fee allowed by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Response Indicator Agree Completion Date 12/31/2022 Response Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property.

Finding # 2022-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157 - Supportive Housing for Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample size information: N/A Criteria: HUD Handbook 4381.5_Rev.2 - Chapter 3 identifies allowed management fees and special fees allowed to be paid. HUD allows a management fee not to exceed $81 PUPM. Statement of Condition: Management fees paid to the management agent exceed the maximum allowed by HUD in the amount of $37,676. In addition, the Management Agent was paid compliance fees in the amount of $10,450, which is not an allowed HUD cost. Cause: The design or operation of control over the calculation and payment of allowed management fees and compliance fees are not sufficient to prevent or detect or correct unallowed payments. Effect or Potential Effect: The Management Agent was overpaid. Auditor Non-Compliance Code: J - Unauthorized Management Fees. Questioned Costs: $48,126 Reporting Views of Responsible Officials: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Context: N/A Recommendations: We recommend that Management refund the overpayments and establish procedures to ensure that the management fees do not exceed the maximum PUPM fee allowed by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Response Indicator Agree Completion Date 12/31/2022 Response Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property.

Finding # 2022-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157 - Supportive Housing for Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample size information: N/A Criteria: HUD Handbook 4381.5_Rev.2 - Chapter 3 identifies allowed management fees and special fees allowed to be paid. HUD allows a management fee not to exceed $81 PUPM. Statement of Condition: Management fees paid to the management agent exceed the maximum allowed by HUD in the amount of $37,676. In addition, the Management Agent was paid compliance fees in the amount of $10,450, which is not an allowed HUD cost. Cause: The design or operation of control over the calculation and payment of allowed management fees and compliance fees are not sufficient to prevent or detect or correct unallowed payments. Effect or Potential Effect: The Management Agent was overpaid. Auditor Non-Compliance Code: J - Unauthorized Management Fees. Questioned Costs: $48,126 Reporting Views of Responsible Officials: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Context: N/A Recommendations: We recommend that Management refund the overpayments and establish procedures to ensure that the management fees do not exceed the maximum PUPM fee allowed by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Response Indicator Agree Completion Date 12/31/2022 Response Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property.

Finding # 2022-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157 - Supportive Housing for Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample size information: N/A Criteria: HUD Handbook 4381.5_Rev.2 - Chapter 3 identifies allowed management fees and special fees allowed to be paid. HUD allows a management fee not to exceed $81 PUPM. Statement of Condition: Management fees paid to the management agent exceed the maximum allowed by HUD in the amount of $37,676. In addition, the Management Agent was paid compliance fees in the amount of $10,450, which is not an allowed HUD cost. Cause: The design or operation of control over the calculation and payment of allowed management fees and compliance fees are not sufficient to prevent or detect or correct unallowed payments. Effect or Potential Effect: The Management Agent was overpaid. Auditor Non-Compliance Code: J - Unauthorized Management Fees. Questioned Costs: $48,126 Reporting Views of Responsible Officials: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Context: N/A Recommendations: We recommend that Management refund the overpayments and establish procedures to ensure that the management fees do not exceed the maximum PUPM fee allowed by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property. Response Indicator Agree Completion Date 12/31/2022 Response Management Agent will refund all amounts owed to the property per audit finding. Going forward only HUD approved fees will be charged to the property.