Finding Text
U.S. Department of Housing and Urban Development 14.181 ? Supportive Housing for Persons with Disabilities Section 811 Capital Advance 2022-003 Allocation of Administration Expenses Condition: Administration expenses, relating to the Lead Maintenance Technician; Inspector and Director of Senior Housing were allocated to the Project, as frontline expenses, recorded to Office Salaries; Payroll Taxes; 401K Contributions and Group Insurance, during the 2022 calendar year. Criteria: Front-line costs activities include the following: 1) taking applications; 2) screening, certifying and recertifying residents; 3) maintaining the project; and 4) accounting for project income and expenses. Effect: Administration expenses allocated from the Corporate office should be processed through the management fee, resulting in potential questioned cost of $6,609.43. Cause: Misinterpretation by management with regards to Front-line costs and expenses charged to the management fee. Context: Administration expense allocated to the Project, during the 2022 calendar year. Population Size Number: 24 allocations of administration expenses Dollar Amount: $ 6,609.43. charged to the Project. Sample Number: 2 allocation periods. Dollar Amount: $ 449.75. Items Not in Compliance Number: 2 allocation periods. Dollar Amount: $ 449.75. Questioned Costs There is potential questioned cost of $6,609.43. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Terra Quest, Inc., record Administration expense as part of the management fee for the Project. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Allocations have stopped.