Audit 383012

Finding reference number: 2025-001 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157 (Section 202 loan identification number 035-EE029) Auditor non-compliance code: J - Unauthorized management fees Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size population: The sample size information is not applicable to the finding. Name of Federal Agency: U.S. Department of Housing and Urban Development Noncompliance information: See statement of condition #2025-001 for noncompliance information. Question costs: $27,696 Statement of condition #2025-001: On June 30, 2024, the Corporation's HUD-approved management agent certification (form HUD 9839-B Owner's/Management Agent Certification) expired. As of June 30, 2025, HUD approval of the management agent certification is pending. The Corporation paid unauthorized management fees of $27,696 during the year ended June 30, 2025. Criteria: Pursuant to HUD Handbook 4381.5 REV-2, the Corporation must have a HUD approved Management Agent Certification HUD Form 9839-B. Effect: The Corporation paid unauthorized management fees of $27,696 during the year ended June 30, 2025. Cause: Management submitted a new management agent certification to HUD during 2025, but HUD has not yet approved the management agent certification. Recommendation: Management should monitor the expiration dates of Form HUD 9839-B in the future and management fees should not be paid until the certification is approved. Reporting views of the responsible officials: Management concurs with the recommendation and has submitted HUD form 9839-B and is awaiting HUD approval.