Finding 496193 (2023-003)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-09-09
Audit: 319145
Auditor: M Group LLP

AI Summary

  • Core Issue: Projects increased management fees by 5% without HUD approval, leading to overpayments.
  • Impacted Requirements: Management fees must adhere to the HUD approved agreement.
  • Recommended Follow-up: Submit the updated management fee rate on HUD Form 9839 for approval.

Finding Text

Finding #2023-003: Section 8 Housing Assistance Payments Program Assistance Listing 14.195 Project Name of Afton Gardens, LLC, FHA/Contract No. of VA36L00002, Amount of $18,183; Project Name of Boulder Creek, LLC, FHA/Contract No. of SC16M000064, Amount of $42,313; Project Name of Brentwood Crossing, LLC, FHA/Contract No. of NC19M000070, Amount of $266,088; Project Name of Brittany Woods/Park Chase, LLC, FHA/Contract No. of GA06L00060, Amount of $23,154; Project Name of Cedar Moor, LLC, FHA/Contract No. of NC19L000146, Amount of $14,359; Project Name of Crescent Hills, LLC, FHA/Contract No. of SC16M000062, Amount of $33,321; Project Name of Spring Grove, LLC, FHA/Contract No. of SC16L000003 and SC160056002, Amount of $45,038; Project Name of Timber Ridge, LLC, FHA/Contract No. of NC19M000088, Amount of $26,759; Project Name of Gretna Village, LP, FHA/Contract No. of 02-1709-HF/SP and 02-1710-HCD, Amount of $5,839; Project Name of Waters at James Corssing, LP, FHA/Contract No. of VA36L000130, Amount of $9,041; Total of $484,095. Condition: The Projects paid management fees during 2022 and 2023 at an increased rate of 5% without approval from HUD. Criteria: The Projects property management fees must follow the HUD approved management agreement. Effect: The Projects overpaid property management fees in 2022 and 2023. Questioned Cost: $484,095 Cause: Oversight Repeat Finding: No Recommendation: The Projects need to submit the new management fee rate on HUD Form 9839 for approval. Auditor’s Comment: The Projects are in the process of submitting the updated Form 9839 to HUD for approval.

Corrective Action Plan

CORRECTIVE ACTION PLAN Name and Number of the Project: Afton Gardens, LLC, VA36L00002; Boulder Creek, LLC, SC16M000064; Brentwood Crossing, LLC, NC19M000070; Brittany Woods/Park Chase, LLC, GA06L00060; Cedar Moor, LLC, NC19L000146; Crescent Hills, LLC, SC16M000062; Spring Grove, LLC, SC16L000003 and SC160056002; Timber Ridge, LLC, NC19M000088; Gretna Village, LP, 02-1709-HF/SP and 02-1710-HCD; Waters at James Crossing, LP, VA36L000130. Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2023 Compliance Review COMMENTS ON FINDINGS AND RECOMMENDATIONS We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. ACTIONS TAKEN OR TO BE TAKEN FINDING 2023-003: Section 8 Housing Assistance Payments Program, Assistance Listing 14.195 CORRECTIVE ACTION TO BE COMPLETED: The Projects are in the process of submitting an updated HUD Form 9839 for approval. We have prepared the corrective action plan as required by the standards applicable to financial statements contained in Government Auditing Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards. Any questions regarding the above corrective action plan should be directed to Mr. Michael N. Nguyen, President & CEO of Atlantic Housing Management, Inc.

Categories

Questioned Costs HUD Housing Programs

Other Findings in this Audit

  • 496191 2023-001
    Material Weakness
  • 496192 2023-002
    Material Weakness
  • 496194 2023-003
    Significant Deficiency
  • 496195 2023-003
    Significant Deficiency
  • 496196 2023-003
    Significant Deficiency
  • 496197 2023-003
    Significant Deficiency
  • 496198 2023-003
    Significant Deficiency
  • 496199 2023-003
    Significant Deficiency
  • 496200 2023-003
    Significant Deficiency
  • 496201 2023-003
    Significant Deficiency
  • 496202 2023-003
    Significant Deficiency
  • 496203 2023-005
    Significant Deficiency
  • 496204 2023-005
    Material Weakness
  • 496205 2023-004
    Significant Deficiency
  • 496206 2023-004
    Significant Deficiency
  • 496207 2023-004
    Significant Deficiency
  • 496208 2023-004
    Significant Deficiency
  • 496209 2023-004
    Significant Deficiency
  • 1072633 2023-001
    Material Weakness
  • 1072634 2023-002
    Material Weakness
  • 1072635 2023-003
    Significant Deficiency
  • 1072636 2023-003
    Significant Deficiency
  • 1072637 2023-003
    Significant Deficiency
  • 1072638 2023-003
    Significant Deficiency
  • 1072639 2023-003
    Significant Deficiency
  • 1072640 2023-003
    Significant Deficiency
  • 1072641 2023-003
    Significant Deficiency
  • 1072642 2023-003
    Significant Deficiency
  • 1072643 2023-003
    Significant Deficiency
  • 1072644 2023-003
    Significant Deficiency
  • 1072645 2023-005
    Significant Deficiency
  • 1072646 2023-005
    Material Weakness
  • 1072647 2023-004
    Significant Deficiency
  • 1072648 2023-004
    Significant Deficiency
  • 1072649 2023-004
    Significant Deficiency
  • 1072650 2023-004
    Significant Deficiency
  • 1072651 2023-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $11.82M
14.239 Home Investment Partnerships Program $3.44M
14.195 Section 8 Housing Assistance Payments Program $603,958