Finding 972699 (2023-001)

Finding 2023-001- Considered a significant deficiency in internal control over compliance. Federal Program: Mortgage Insurance for the Purchase or Refinancing of Multifamily Housing Projects ALN #: 14.155 Federal agency: U.S. Department of Housing and Urban Development (HUD) Criteria: Organization management is responsible for ensuring the management fees are paid in accordance with the HUD approved management certification. Condition: The Organization overpaid management fees by $250 for the year ended December 31, 2023. Questioned costs: $250 Cause: Organization 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 250 dollars that is owed back to the organization. Auditor Noncompliance Code: J – Unauthorized management fees