Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT (CONTINUED) Department of Housing and Urban Development Finding 2025-002: Major Program: Section 8 Housing Assistance Payments Program, Federal Assistance Listing Number 14.195 STATEMENT OF CONDITION Management fees were overcharged by $4. CRITERIA HUD Handbook 4381.5 Revision 2 for HUD Subsidized Multifamily Housing Programs specifies the types of income that may be treated as income when determining the management fee allowed. EFFECT OF CONDITION Income was incorrectly included in the calculation of management fees causing the management fee to be overcharged for 2025. CONTEXT During audit fieldwork, management fees were tested for compliance with allowable management fees from project funds criteria. Ineligible cash receipts per HUD were included in the cash receipts for the management fee calculation resulting in a higher calculated management fee. CAUSE OF CONDITION Management mistakenly included income in the calculation that is not allowed per the HUD Handbook. RECOMMENDATION The auditor recommends management review the HUD Handbook on determining income included in the management fee calculation. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS Management will review the HUD Handbook on allowable income included in the management fee calculation and ensure monthly calculations be reviewed for out of the ordinary income sources.