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 $10,442 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
$10,442
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
The management company should reimburse the project for overpaid management fee in the
amount of $10,442 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