Finding Text
Criteria
During the year ended June 30, 2024, the Project paid management fees of $1,212 in excess of the
amount approved by HUD.
Condition
Management fee payments are limited to amounts determined in accordance with the terms of the
HUD approved management agreement.
Cause
There were 2 different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$1,212
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
The management company should reimburse the Project for overpaid management fee in the
amount of $1,212 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code:
J - Unauthorized management fees
View of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: In process