FAC Explorer

Finding 398421 (2023-003)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-05-23
Audit: 307115
Organization: Metro Towers, Inc. St. James Place (MO)
Auditor: Welch & Associates LLC

AI Summary

  • Core Issue: The Organization lacked a HUD approved Form 9839-B from March 1, 2023, to December 31, 2023, which is required for managing multifamily housing projects.
  • Impacted Requirements: Compliance with HUD guidelines for project management certification is essential, and failure to submit the form led to unauthorized management fees.
  • Recommended Follow-up: The Organization should file the HUD Form 9839-B immediately and request retrospective approval effective March 1, 2023, with a completion target of June 30, 2024.

Finding Text

S3800-010: Finding Reference Number 2023-003 (Significant Deficiency) S3800-011: Program Information Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Federal Agency: Department of Housing and Urban Development (HUD) Assistance Listing #: 14.155 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N – Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines to have a HUD approved Project Owner’s/Management Agent’s Certification for housing projects managed by Administrators for extremely or very low-income persons (Form 9839-B). S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended December 31, 2023 federal award program, we noted the Organization did not have a HUD approved Form 9839-B from March 1, 2023 through December 31, 2023. S3800-032: Cause The Organization did not submit a request for approval. S3800-033: Effect or Potential Effect Management has not been approved to manage the Project for this period. S3800-035: Auditor Non-Compliance Code: J – Unauthorized management fees S3800-040: Questioned Costs $20,106 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to have all of its necessary forms and licenses current and up to date. S3800-080: Recommendation The Organization should file HUD Form 9839-B immediately. Additionally, the Organization should ask HUD to retrospectively approve Form 9839-B effective March 1, 2023. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2024 S3800-150: Response See Corrective Action Plan

Corrective Action Plan

CORRECTIVE ACTION PLAN FOR THE YEAR ENDED DECEMBER 31, 2023 Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart F, Section 511 – Audit Findings Follow-up requires the auditee to prepare a corrective action plan to address each audit finding included in the current year auditor’s reports. The Corrective Action Plan for Current Year Findings present our corrective action plan for the Financial Statement and/or Federal Award Findings described in the accompanying Schedule of Findings and Questioned Costs for the period ended December 31, 2023. Finding 2023-003 Responsible Party Name: Fred Gibbs Position: President – Management Agent Telephone Number: 913-709-1811 Federal Agency U.S. Department of Housing and Urban Development Federal Program Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Compliance Requirements N – Special Tests and Provisions Finding Type Federal Awards Auditee’s Comment on Finding We agree with the auditor’s finding. Corrective Action We will file HUD Form 9839-B with HUD and ask them to retrospectively approve this form effective February 28, 2023. Anticipated Completion Date June 30, 2024

Categories

Questioned Costs HUD Housing Programs Special Tests & Provisions Procurement, Suspension & Debarment Subrecipient Monitoring Reporting Significant Deficiency

Other Findings in this Audit

  • 398419 2023-001
    Material Weakness
  • 398420 2023-002
    Material Weakness
  • 398422 2023-004
    Material Weakness
  • 974861 2023-001
    Material Weakness
  • 974862 2023-002
    Material Weakness
  • 974863 2023-003
    Significant Deficiency
  • 974864 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.74M
14.195 Section 8 Housing Assistance Payments Program $334,591