The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the University Village, LLC in Orem Utah based on previous violations identified by the U.S. Department of Housing and Urban Development (HUD) that found ineligible withdrawals and substandard physical conditions at the property. The objective of our audit was to determine whether University Village complied with its HUD multifamily Federal Housing Administration regulatory agreement when taking distributions.
University Village took unauthorized distributions without being in a surplus-cash position or having prior HUD approval. It took nine unauthorized distributions from April 2014 to March 2016 totaling more than $305,000.
We recommend that the Director of HUD’s Denver Office of Multifamily Housing Programs require University Village to (1) repay the project $305,351 for the unauthorized distributions and (2) develop and implement policies for owner distributions to ensure that it complies with its regulatory agreement.