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 agreement. Condition During the year ended December 31, 2024, the project paid management fees of $466 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 $466 Context The project overpaid $466 in management fees, exceeding the HUD-approved amount. This overpayment is classified as an unauthorized distribution under HUD regulations and is attributed to insufficient management oversight. 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 $466 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.