Finding Text
Finding reference number: 2024-002 Assistance Listing (Federal award identification number and year): Section 8 Housing Assistance Program, Assistance Listing. No. 14.195, IL06L000039, 2003 Auditor non-compliance code: N. Special Tests and Provisions Finding resolutions status: In Process. Universe population size: The universe population size is not applicable to the finding. Sample size population: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable. Name of federal agency: U.S Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $42,201 Statement of condition #2024-002: During the year ended December 31, 2024, AR Preservation, LP prepaid management fees of $42,201. Criteria: Pursuant to the approved Project Owner's/Management Agent's Certification (Form HUD-9839-B) Section 1 (b), the Agent will manage the project for the term and fee described in Project Owner's/Management Agent's Certification. The Project Owner's/Management Agent's Certification provides for payment of management fees equal to 6% of residential and miscellaneous income collected. Effect: AR Preservation, LP is not in compliance with the Project Owner's/Management Agent's Certification. AR Preservation, LP's cash position at December 31, 2024 has been reduced by $42,201. Cause: Monthly management fee payments were made prior to collections. Recommendation: The Agent should reduce the fees charged in the following periods or repay management fees of $42,201 and limit future payment of management fees to management fees earned based on collections. Management's response: Management concurs with the finding and agrees with the recommendation. The Agent will reduce the fees charged in the following periods by $42,201.