Finding Text
FINDING No. 2023-001: Section 207/223(f) Mortgage Insurance for the
Refinancing of Existing Multifamily Rental Housing
Projects, ALN 14.155
Finding Resolution Status: Unresolved.
Information on Universe Population
Size:
All management fee expenses.
Sample Size Information: All management fee expenses.
Identification of Repeat Finding and
Finding Reference Number:
Yes, 2022-001.
Criteria: As required by HUD, the Project shall only use funds as
specified in the Regulatory Agreement and owes the
management company fees at the rate specified in the
Project Owner’s/Management Agent’s Certification (Form
HUD-9839-B).
Statement of Condition: As a result of an expired Form HUD-9839-B, the Project
has been overcharged management fees, resulting in an
unauthorized loan to the Management Company.
Cause: The Project’s Form HUD-9839-B expired and a new one
was not prepared nor approved by HUD.
Effect or Potential Effect: The Project has made an unauthorized loan to the
management company as a result of overpaying
management fees of $4,014.
Auditor Non-Compliance Code: J – Unauthorized Management Fees.
Reporting Views of Responsible
Officials:
The Project agrees with the finding and the auditor’s
recommendations will be adopted. Recommendation: The Project should implement procedures to monitor the
expiration of HUD required documents to ensure timely
preparation and approval.
Response Indicator: Agree
Completion Date:
3/31/2024
Response: To ensure timely renewals, management created a
separate department that will handle all management
certification renewals.