Finding Text
Department of Housing and Urban Development Finding 2024-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreemen. Condition During the year ended September 30, 2024, the project paid management fees of $216 in excess of the amount approved by HUD. Cause Lack of management oversight caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned costs $216 Context The project paid $216 in management fees during the year ended September 30, 2024, exceeding the amount approved by HUD. This overpayment is considered an unauthorized distribution due to noncompliance with the management agreement terms and has been classified as a questioned cost. Identification as a Repeat Finding Not a repeat finding Recommendation The management company should reimburse the project for overpaid management fee in the amount of $216 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the management agreement. Auditor Noncompliance Code: J - Unauthorized management fees Finding Resolution Status: In Process
Reporting Views of Responsible Officials Management will repay the property and update our procedures to correctly calculate management fees.