Finding 1238296 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-09-29
Audit: 413165
Organization: Sunray Communities, Inc. (TX)
Auditor: M GROUP LLP

AI Summary

  • Core Issue: The Company exceeded HUD-approved management fees by $4,578.
  • Impacted Requirements: Management fees must adhere to the HUD-approved agreement (Form 9839).
  • Recommended Follow-Up: Implement monitoring processes to ensure compliance with management fee limits.

Finding Text

Finding 2025-001: Significant Deficiency Finding #2025-001: Supportive Housing for the Elderly, Assistance Listing 14.157 Condition: The Company expensed management fees during 2025 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: $4,578 Cause: Oversight 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 and an accounts receivable - other from the property management company was created for the overpayment.

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, 2025 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 2025-001: Supportive Housing for the Elderly, Assistance Listing 14.157 CORRECTIVE ACTION COMPLETED: An adjusting audit entry was made to reduce the property management fees and an accounts receivable - other from the property management company was created for the overpayment. 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

HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $212,006