Finding 949020 (2023-001)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Supportive Housing for the Elderly CFDA Number: 14.157 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control over Compliance Criteria: The HUD Management Agent Handbook requires that allowable management fees be calculated based, in part, on rents received during the award period. Condition: The Organization included rents earned, though not yet received from HUD, in its calculation of its allowable management fee, resulting in management fee expense in excess of the allowable amount. This was detected and corrected as part of the audit. Questioned Costs: $0 Cause: The year-end rents due from HUD were not backed out of the calculation of allowable management fee expense, as required by the HUD Management Agent Handbook. Effect or possible effect: Resulted in management fee expense in excess of amount allowable per the HUD Management Agent Handbook. This was detected and corrected as part of the audit. Recommendation: We recommend that the Organization review the HUD Management Agent Handbook and revise its internal control policies with regards to calculating its allowable management fee per the Handbook. Views of responsible officials: See management’s corrective action plan.