Finding Text
Finding 2021-002 – Allowable Costs/Cost Principles – Material Weakness
Name of Federal Agency: Department of Housing and Urban Development
Federal Program Name and Assistance Listing Number: Supportive Housing for Persons with Disabilities (Section 811), Assistance Listing 14.181
Federal Award Identification Number and Year: N/A and 1997
Name of Pass-through Entity: N/A
Criteria
Management fee payments are limited to amounts determined in accordance with the terms of the
management agreement.
Condition
During the year ended September 30, 2021, HES paid the management agent for costs in excess of
amounts incurred by the management agent totaling $30,803 of which $18,674 remians outstanding.
Cause
Internal controls were not in place to ensure that payments to the management agent were allowable
costs.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$18,674
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Context
See the context of the finding detailed in the condition section above.
Identification as a Repeat Finding
This finding is a repeat finding (see prior year finding number 2020-002).
Auditor Noncompliance Code: J – Unauthorized management fees
Finding Resolution Status: Unresolved
Views of Responsible Officials
HES agrees with the finding and the auditor's recommendations have been adopted