Finding 503918 (2024-006)

Material Weakness
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2024-10-28

AI Summary

  • Core Issue: Management paid $6,208 in fees beyond what HUD approved.
  • Impacted Requirements: Payments must align with the HUD approved management agreement.
  • Recommended Follow-Up: Management should reimburse the excess amount and establish procedures to prevent future overpayments.

Finding Text

Criteria Management fee payments are limited to amounts determined in accordance with the terms of the HUD approved management agreement. Condition During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of the amount approved by HUD. Cause There were two 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 $6,208 Identification as a Repeat Finding This is not a repeat finding. Recommendation The management company should reimburse the project for overpaid management fee in the amount of $6,208 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 Views 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.

Corrective Action Plan

Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward.

Categories

Questioned Costs Cash Management HUD Housing Programs

Other Findings in this Audit

  • 503908 2024-001
    Material Weakness
  • 503909 2024-001
    Material Weakness
  • 503910 2024-002
    Material Weakness
  • 503911 2024-002
    Material Weakness
  • 503912 2024-003
    Material Weakness
  • 503913 2024-003
    Material Weakness
  • 503914 2024-004
    Material Weakness
  • 503915 2024-004
    Material Weakness
  • 503916 2024-005
    Material Weakness
  • 503917 2024-005
    Material Weakness
  • 503919 2024-006
    Material Weakness
  • 1080350 2024-001
    Material Weakness
  • 1080351 2024-001
    Material Weakness
  • 1080352 2024-002
    Material Weakness
  • 1080353 2024-002
    Material Weakness
  • 1080354 2024-003
    Material Weakness
  • 1080355 2024-003
    Material Weakness
  • 1080356 2024-004
    Material Weakness
  • 1080357 2024-004
    Material Weakness
  • 1080358 2024-005
    Material Weakness
  • 1080359 2024-005
    Material Weakness
  • 1080360 2024-006
    Material Weakness
  • 1080361 2024-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $6.05M
14.157 Supportive Housing for the Elderly ("prac") $367,800