Finding 1080318 (2024-003)

Material Weakness
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2024-10-28
Audit: 326215
Organization: Renaissance Gardens, Inc. (MD)
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: The Project overpaid management fees by $13,346, exceeding HUD's approved amount.
  • Impacted Requirements: Payments must align with the terms of the HUD approved management agreement.
  • Recommended Follow-Up: Management should reimburse the Project and establish procedures to prevent future overpayments.

Finding Text

Criteria During the year ended June 30, 2024, the Project paid management fees of $13,346 in excess of the amount approved by HUD. Condition Management fee payments are limited to amounts determined in accordance with the terms of the HUD approved management agreement. Cause There were 2 different management agreements and management did not follow the HUD approved management agreement when paying management fees from operations. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs The payments of $13,346 were unauthorized loans and therefore considered to be questioned costs. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation The management company should reimburse the Project for overpaid management fee in the amount of $13,346 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the HUD approved management agreement. Auditor Noncompliance Code J. Unauthorized management fees Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward. Finding Resolution Status: Unresolved

Categories

Questioned Costs Cash Management HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 503872 2024-001
    Material Weakness
  • 503873 2024-001
    Material Weakness
  • 503874 2024-002
    Material Weakness
  • 503875 2024-002
    Material Weakness
  • 503876 2024-003
    Material Weakness
  • 503877 2024-003
    Material Weakness
  • 1080314 2024-001
    Material Weakness
  • 1080315 2024-001
    Material Weakness
  • 1080316 2024-002
    Material Weakness
  • 1080317 2024-002
    Material Weakness
  • 1080319 2024-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $7.98M
14.157 Supportive Housing for the Elderly ("prac") $308,616