Finding 1229124 (2025-001)

FINDING No. 2025-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Management fees. Sample Size Information: All management fee expenses. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD, the Project shall only use funds as specified in the Regulatory Agreement and owes the management company fees at the rate specified in the Project Owner’s/Management Agent’s Certification (Form HUD-9839-B). Statement of Condition: As a result of the expiration of Form HUD-9839-B on July 25, 2025, the Project has been overcharged $12,375 in management fees. Cause: The Project’s Form HUD-9839-B expired and the renewal has not been approved by HUD. Effect or Potential Effect: The Project overstated the management fee amount payable to the management agent. Auditor Non-Compliance Code: J – Unauthorized Management Fees. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendation will be adopted. Recommendation: The Project should implement procedures to monitor the expiration of HUD required documents to ensure timely preparation and approval. Response Indicator: Agree. Completion date: 12/31/2026. Response: Management is in the process of renewing all management certifications and will provide accountant extra training to monitor.