Finding Text
Finding 2025-001 - Special Tests and Provisions U.S. Department of Housing and Urban Development Federal Program Name: Section 202 Supportive Housing for the Elderly Assistance Listing Number: 14.157 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, 2024, the project paid management fees totaling $466 in excess of the amount approved by HUD in 2024, and this excess was not reimbursed during the year ended September 30, 2025. Cause Lack of management oversight caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $466 Context The project overpaid $466 in management fees, exceeding the HUD-approved amount during the year ended September 30, 2024. This overpayment is classified as an accounts receivable - entity under HUD regulations and is attributed to insufficient management oversight. Management did not repay this overpayment during the year ended September 30, 2025. Identification as a Repeat Finding: Yes. See 2024-001 Recommendation The management company should reimburse the project for overpaid management fee in the amount of $466 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the management agreement. Auditor Noncompliance Code J - Unauthorized management fees Finding Resolution Status In Process Reporting Views of Responsible Officials Management will repay the property and update our procedures to correctly calculate management fees.