Finding Text
Finding No. 2022-005
HUD Low Income Housing Preservation and Resident Homeownership Act of 1990
Federal Assistance Listing Number #99.999
Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions
Criteria
Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines as found in HUD Handbook 4381.5 REV-2, “The Management Agent Handbook”, to submit certain data for review by the local HUD office for approval of a new management agent. These requirements apply to insured multifamily projects or HUD-held mortgages and subsidized, non-insured projects that are not financed by State Agencies or the Rural Housing Service Agency.
Condition
The owner was unable to provide the Management Entity Profile HUD 9832 documentation for one of two properties tested and approved Management Agent's Certification HUD 9839-B for one of two properties tested.
Cause
Lack of management oversight caused management fees to be paid without an approved Management Agent's Certification HUD form HUD-9839-B during the current year.
Effect or Potential Effect
Management fees may have been overpaid for the year ended December 31, 2022.
Questioned Costs: $4,320.
Context
In connection with the procedures applied to a sample of two properties one was unable to obtain the HUD 9832 Management Agent Profile specifying the management entity and related information and one was unable to provide an approved Management Agent's Certification HUD form HUD-9839-B and therefore we were unable to determine if the management fees paid were in compliance with the HUD approved management fee percentage.
Repeat Finding: Yes – 2021-007
Recommendation
Management should secure a HUD 9832 Management Agent Profile and an approved Management Agent's Certification HUD form HUD-9839-B and review fees paid to ensure compliance with HUD requirements for this property and take any action necessary resulting from this review.
Views of Responsible Officials
REACH has contacted HUD office to request missing copies of HUD approved Management entity profile and certifications.