Finding Text
FINDING No. 2024-004: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Rental Housing Projects, ALN 14.155
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All management fee expenses.
Sample Size Information: All management fee expenses.
Identification of Repeat Finding and Finding Reference Number: Yes, 2023-001
Criteria: As required by HUD, the Project shall only use funds as specified in the Regulatory Agreement and owes the management company fees at the rate specified in the Project Owner’s/Management Agent’s Certification (Form HUD-9839-B).
Statement of Condition: As a result of an expired Form HUD-9839-B, the Project has been overcharged management fees, resulting in an unauthorized loan to the management company.
Cause: The Project’s Form HUD-9839-B expired and a new one was not prepared nor approved by HUD.
Effect or Potential Effect: The Project has made an unauthorized loan to the management company as a result of overpaying management fees of $52,384.
Auditor Non-Compliance Code: J – Unauthorized Management Fees.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendation will be adopted. Recommendation: The Project should implement procedures to monitor the expiration of HUD required documents to ensure timely preparation and approval.
Response Indicator: Agree.
Completion Date: 3/31/2025
Response: Management is in the process of obtaining a new management agent certification. Questioned Costs – Department of Housing and Urban Development $52,384
Total Questioned Costs – Department of Housing and Urban Development $111,585