Pine Cone Manor, Inc.

Federal Agency : U.S. Department of Housing and Urban Development Federal Program Name: Section 202 Capital Advance Assistance Listing Number: 14.157 Federal Award Identification Number and Year: MN46S961004 - 1998 Award Period: June 1998 - June 2038 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters or immaterial Compliance Criteria or Specific Requirement: Management fees will be charged utilizing the HUD approved rate per the Management Agent's Certification Form HUD-9839-B Condition: During the testing of the management fee expense, it was noted that an amount in excess of the approved rate was charged, resulting in a receivable from the management agent. Questioned Costs: $1,460 Context: During the testing of the managent fee expense, it was noted that the amount expensed / paid was in excess of the HUD approved rate. Cause: The management agent converted the general ledger system used for the Organization at the beginning of the fiscal year. During that conversion, the incorrect management fee rate was entered into the system, causing the overpayment and receivable at year end. Effect: An excess payment was made, causing a receivable equal to an unauthorized loan. Repeat Finding: No Recommendation: Management should implement a review process of the management fee rate upon any changes to that rate or system utilized to calculate that rate to ensure the HUD approved rate is utilized. Management should repay the amount due the Organization.

GSA_MIGRATION