Audit 50873

Finding reference number: #2022-001 Assistance listing title and number (Federal award identification number and year): Mortgage insurance for the purchase or refinancing of existing multifamily housing projects, Assistance Listing Number 14.155, 2013 (Project identification number 085-11150) Auditor non-compliance code: J - Unauthorized management fees Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition #2022-001 for noncompliance information. Statistically valid sample: N/A Name of Federal Agency: U.S. Department of Housing and Urban Development Pass through entity: N/A Questioned costs: $14,911 Statement of condition #2022-001: From the period October 1, 2021 through June 30, 2022, the Corporation did not have a HUD approved Project Owner's/Management Agent's Certification (HUD-9839-B). Criteria: Pursuant to the Regulatory Agreement and HUD Handbook, the Corporation's management agent must have an approved Project Owner's/Management Agent's Certification (HUD-9839-B). Effects or potential effect: The Corporation is not in compliance with the Regulatory Agreement. Management fees should not be paid without an approved Project Owner's/Management Agent's Certification (HUD-9839-B). Cause: The Property changed management agent's effective October 1, 2021 and HUD has not returned an executed Project Owner's/Management Agent's Certification (HUD-9839-B) to the new management agent. Recommendation: Management should continue to request the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD. Management should not pay any management fees until the executed Project Owner's/Management Agent's Certification (HUD-9839-B) is received. Completion date: June 30, 2023 Management Response: Agree. Management received email correspondence from HUD on August 12, 2021 that stated the Agent is approved to take over management immediately and the Project Owner's/Management Agent's Certification (HUD-9839-B) would be retroactively effective. Management has continued to seek the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD.

Finding reference number: #2022-001 Assistance listing title and number (Federal award identification number and year): Mortgage insurance for the purchase or refinancing of existing multifamily housing projects, Assistance Listing Number 14.155, 2013 (Project identification number 085-11150) Auditor non-compliance code: J - Unauthorized management fees Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition #2022-001 for noncompliance information. Statistically valid sample: N/A Name of Federal Agency: U.S. Department of Housing and Urban Development Pass through entity: N/A Questioned costs: $14,911 Statement of condition #2022-001: From the period October 1, 2021 through June 30, 2022, the Corporation did not have a HUD approved Project Owner's/Management Agent's Certification (HUD-9839-B). Criteria: Pursuant to the Regulatory Agreement and HUD Handbook, the Corporation's management agent must have an approved Project Owner's/Management Agent's Certification (HUD-9839-B). Effects or potential effect: The Corporation is not in compliance with the Regulatory Agreement. Management fees should not be paid without an approved Project Owner's/Management Agent's Certification (HUD-9839-B). Cause: The Property changed management agent's effective October 1, 2021 and HUD has not returned an executed Project Owner's/Management Agent's Certification (HUD-9839-B) to the new management agent. Recommendation: Management should continue to request the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD. Management should not pay any management fees until the executed Project Owner's/Management Agent's Certification (HUD-9839-B) is received. Completion date: June 30, 2023 Management Response: Agree. Management received email correspondence from HUD on August 12, 2021 that stated the Agent is approved to take over management immediately and the Project Owner's/Management Agent's Certification (HUD-9839-B) would be retroactively effective. Management has continued to seek the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD.