Finding 585227 (2023-001)

Finding reference number: 2023-001 Assistance Listing (Federal award identification number and year): Supportive Housing for Persons with Disabilities, 14.181, 1995 (Project identification number 085-HD007) Auditor non-compliance code: J - Unauthorized management fees Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $9,696 Statement of condition 2023-001: For the year ended June 30, 2023, the Corporation did not have a HUD approved Project Owner's/Management Agent's Certification (HUD-9839-B). Criteria: Pursuant to the regulatory agreement and HUD handbook 5381.5 REV-2, the Corporation's management agent must have an approved Project Owner's/Management Agent's Certification (HUD9839-B). Effect: The Corporation is not in compliance with the regulatory agreement. Management fees should not be paid without an approved Project Owner's/Management Agent's Certification (HUD-9839-B). Cause: The Property changed management agent's effective October 1, 2021 and HUD has not returned an executed Project Owner's/Management Agent's Certification (HUD-9839-B) to the new management agent. Recommendation: Management should continue to request the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD. Management should not pay any management fees until the executed Project Owner's/Management Agent's Certification (HUD-9839-B) is received. Completion date: June 30, 2024 Management's response: Agree. Management received email correspondence from HUD on August 12, 2021 that stated the Agent is approved to take over management immediately and the Project Owner's/Management Agent's Certification (HUD-9839-B) would be retroactively effective. Management has continued to seek the executed Project Owner's/Management Agent's Certification (HUD-9839-B) from HUD.