Finding 1156136 (2024-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
$1
Year
2024
Accepted
2025-09-29
Audit: 368559
Organization: Sunray Communities, Inc. (TX)
Auditor: M Group LLP

AI Summary

  • Issue: The Company exceeded HUD-approved management fees by $11,882 in 2024.
  • Requirements Impacted: Management fees must adhere to the terms of the HUD-approved management agreement.
  • Follow-Up: Implement monitoring processes to ensure compliance with management fee limits moving forward.

Finding Text

Finding #2024-001: Supportive Housing for the Elderly, Assistance Listing 14.157 Type of Finding: Significant deficiency Condition: The Company expensed management fees during 2024 in excess of the maximum amount of management fees approved by HUD. Criteria: The Company’s property management fees must follow the HUD approved management agreement. Effect: The Company expensed management fees in excess of approved HUD Form 9839. Questioned Cost: $11,882 Cause: New property management company Repeat Finding: Yes Recommendation: The Company should monitor property management fees to ensure the management fees follow the terms set forth in the property management agreement. Auditor’s Comment: An adjusting journal entry was made to reduce property management fees to be in compliance with HUD.

Corrective Action Plan

CORRECTIVE ACTION PLAN Name and Number of the Project: Sunray Communities, Inc. No. 112-EE003 Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2024 Compliance Review A. Comments on Findings and Recommendations We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. Actions Taken FINDING 2024-001: Supportive Housing for the Elderly, Assistance Listing 14.157 CORRECTIVE ACTION COMPLETED: An adjusting audit entry was made to reduce the property management fees. Management will monitor the expenses to ensure in compliance with the HUD approved Form 9839. We have prepared the corrective action plan as required by the standards applicable to financial statements contained in Government Auditing Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards. Any questions regarding the above corrective action plan should be directed to Ms. Natalie Bastien, Vice President, RPM Living.

Categories

Questioned Costs HUD Housing Programs Significant Deficiency

Other Findings in this Audit

  • 1156137 2024-002
    Material Weakness Repeat
  • 1156138 2024-003
    Material Weakness Repeat
  • 1156139 2024-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $186,766