Finding Text
Assistance Listing (Federal award identification number and year): Mortgage insurance for
the purchase or refinancing of existing multifamily housing projects, Assistance Listing Number
14.155, 2013 (Project identification number 085-11150)
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: $19,136
Statement of condition 2023-002: 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.