Finding 395924 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-05-06

Audit: 305573

Organization: Hartford Village (MI)

Auditor: Maner Costerisan

AI Summary

Core Issue: The Corporation overpaid management fees by $8,928 due to not adjusting calculations after increasing rent rates.
Impacted Requirements: Management must ensure fees align with HUD-approved certifications and adjust for any changes in rental income.
Recommended Follow-up: Adjust management fee calculations promptly after rent changes and ensure compliance to prevent future overpayments.

Finding Text

Finding 2023-001 - Considered a significant deficiency in internal control over compliance. Federal Program: Mortgage Insurance for Rental Housing for the Elderly ALN #: 14.138 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Criteria: Corporation management is responsible for ensuring the management fees are paid in accordance with the HUD approved management certification. Condition: The Corporation overpaid management fees by $8,928 for the year ended December 31, 2023. Questioned Costs: $8,928 Cause: Corporation did not adjust the HUD-prescribed percentage of rental and other receipts used to calculate management fees after increasing rent rates during 2023. Effect: Management fees were overpaid for the year ended December 31, 2023. Recommendation: The HUD-prescribed percentage of rental and other receipts used to calculate management fees should be adjusted after changes to rent rates to ensure that the management fees charged are under the per-unit-per-month amount outlines in the management agent certification. Management Comments: We agree with the facts and circumstances of this finding and will pay back the $8,928 that is owed back to the Corporation. Auditor Noncompliance Code: J - Unauthorized management fees

Corrective Action Plan

HARTFORD VILLAGE HUD PROJECT NO. 044-38023 CORRECTIVE ACTION PLAN Hartford Village respectfully submits the following corrective action plan for the year ended December 31, 2023. Auditor: Maner Costerisan 2425 E. Grand River Avenue, Suite 1 Lansing, MI 48912 Audit Period: Year ended December 31, 2023 Corporation Contact Person: Bruce Blalock, Director at Management Agent The findings from the December 31, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding – Federal Award Findings and Questioned Costs Finding 2023-001: Considered a significant deficiency in internal control over compliance. Recommendation: The HUD-prescribed percentage of rental and other receipts used to calculate management fees should be adjusted after changes to rent rates to ensure that the management fees charged are under the per-unit-permonth amount outlines in the management agent certification. Action to be Taken: The Organization concurs with the facts of this finding, and will pay back the $8,928 to the organization in the 2024 audit year.

Other Findings in this Audit

972366 2023-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.138	Mortgage Insurance_rental Housing for the Elderly	$10.91M