Finding Text
Findings and Questioned Costs - Major Federal Award Program Audit Department of Housing and Urban Development Finding No. 2022-001; Section 8, Assistance Listing 14.195 Criteria During the year ended June 30, 2022, the project paid management fees of $9,652 in excess of the amount approved by HUD. Condition Management fee payments are limited to the amounts determined in accordance with the terms of the management agreement. Cause Management pays fixed monthly fees and trues up these up at year-end to the amount allowed per the agreements with HUD. Due to the large vacancy amount at the project during the year ended June 30, 2022, the calculation resulted in an unusually large overpayment. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $9,652 Recommendation The management company should reimburse the project for overpaid management fee in the amount of $9,652 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: Cleared Views of Responsible Officials In order to avoid any future overpayment management will proceed to calculate the fee based on the actual monthly collections instead of doing the reconciliation at year-end.