Finding 496198 (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.

Categories

Questioned Costs HUD Housing Programs

Other Findings in this Audit

  • 496191 2023-001
    Material Weakness
  • 496192 2023-002
    Material Weakness
  • 496193 2023-003
    Significant Deficiency
  • 496194 2023-003
    Significant Deficiency
  • 496195 2023-003
    Significant Deficiency
  • 496196 2023-003
    Significant Deficiency
  • 496197 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