Finding Text
Finding 2023-001 - Considered a significant deficiency in internal control over compliance.
Federal Program: Mortgage Insurance for Rental Housing for the Elderly
ALN #: 14.138
Federal Agency: U.S. Department of Housing and Urban Development (HUD)
Criteria: Corporation management is responsible for ensuring the management fees are paid in accordance
with the HUD approved management certification.
Condition: The Corporation overpaid management fees by $8,928 for the year ended December 31, 2023.
Questioned Costs: $8,928
Cause: Corporation did not adjust the HUD-prescribed percentage of rental and other receipts used to calculate
management fees after increasing rent rates during 2023.
Effect: Management fees were overpaid for the year ended December 31, 2023.
Recommendation: The HUD-prescribed percentage of rental and other receipts used to calculate management
fees should be adjusted after changes to rent rates to ensure that the management fees charged are under the
per-unit-per-month amount outlines in the management agent certification.
Management Comments: We agree with the facts and circumstances of this finding and will pay back the $8,928
that is owed back to the Corporation.
Auditor Noncompliance Code: J - Unauthorized management fees