The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Kier Property Management and Real Estate, LLC (Kier) to determine whether Kier properly accounted for property and management agent costs and properly accomplished its occupancy functions.

Kier recorded more than $2 million in notes payable in the properties’ books for notes that did not properly restrict repayment of the principal to surplus cash. Kier also used property funds for $64,800 in ineligible setup fees. Additionally, Kier did not always correctly compute subsidies or determine tenant eligibility.

We recommend that HUD require Kier to work with the owner to ensure that the notes restrict principal payments to surplus cash and to repay the $64,800 in setup fees from nonfederal funds. We also recommend that HUD require Kier to (1) work with HUD to recover identified overpayments of Section 8 housing assistance subsidies, (2) correct the rent miscalculations identified in the report, and (3) develop procedures to consistently communicate changes to the policies and procedures to ensure accurate and consistent rent calculations and related occupancy procedures.