Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Housing Units Assistance Listing Number: 14.155 Federal Award Identification Number and Year: 075-11186 - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of regulatory agreement. Trinity Terrace, Inc., should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that Trinity Terrace, Inc., did not have adequate internal controls designed to ensure management fees were charged in accordance with the provisions of the project/management agent certification. Questioned costs: None Context: During our testing, we noted that the management fees charged to Trinity Terrace, Inc., were in excess of the agreed upon amount based on the provisions of the management agent certification. Cause: The management agent charged Trinity Terrace, Inc., fees based on revenue recorded and not revenue collected as described in the project/management agent certification. Effect: Noncompliance with the HUD regulatory agreement. Recommendation: We recommend that management develop procedures to ensure management fees are charged in accordance with the project/management agent certification. Views of responsible officials: There is no disagreement with the audit finding.