Finding Text
Criteria
Management fee payments are limited to amounts determined in accordance with the terms
of the HUD-approved management agreement.
Condition
During the year ended June 30, 2024, the Project paid management fees of $16,298 in
excess of the amount approved by HUD. Cause
There were two 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
$16,298
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 $16,298 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
Finding Resolution Status: In process.
View 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.