Finding 478207 (2023-001)

Finding Reference Number: 2023-01 Title and Number of Federal Program: Section 202 Capital Advance and PRAC, 14.157 Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: n/a Sample Size Information: n/a Identification of Repeat Finding and Finding Reference Number: n/a Criteria: Amounts paid to management company exceed amounts dictated in agreement and approved by HUD. Statement of Condition: Management fees were overpaid during the year ended December 31, 2023. Cause: Controls were not in place to ensure management fees were calculated and paid in accordance with the agreement. Effect or Potential Effect: The project is not in compliance with HUD requirements. Auditor Non-Compliance Code: J - Unauthorized management fees Questioned Costs: $13,483 Reportable Views of Responsible Officials: Management is in agreement with the finding and will ensure amounts are repaid and controls put into place to prevent future errors. Context: n/a Recommendation: We recommend that management implement policies and procedures necessary to ensure that management fees are paid in accordance with executed agreements and amounts approved by HUD. Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: Agree with management's assessment. Response Indicator: Agree Completion Date: 12/31/2024 Response: Policies and procedures will be reviewed to ensure that management fees are paid in accordance with executed agreements as required by HUD.