Finding Text
Finding reference number: 2024-003 Assistance Listing (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects, No. 14.155 071-35795 Auditor non-compliance code: N. Special Tests and Provisions Finding resolution 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: $278,645 Statement of condition 2024-003: During the year ended December 31, 2024, Hollywood House Limited Partnership paid entity expenses of $278,645 in excess of surplus cash. Criteria: Pursuant to the regulatory agreement, Hollywood House Limited Partnership shall not make or take, or receive or retain, any distribution of assets or any income of any kind of the Project, except from surplus cash or in accordance with the program obligations. Effect: Hollywood House Limited Partnership is not compliance with the regulatory agreement. Cause: Management inadvertently paid entity expenses in excess of surplus cash. Payments of $278,645 were made in excess of surplus cash. Recommendation: Ownership should refund the overpayment to Hollywood House Limited Partnership and limit payments of entity expenses to surplus cash in the future. Management's response: Management concurs with the finding and the recommendation.