November 8, 1995
AUDIT RELATED MEMORANDUM
96-CH-212-1803
MEMORANDUM FOR: John E. Breuer, Acting Director, Multifamily Housing
Division, Grand Rapids Area Office
FROM: Dale L. Chouteau, District Inspector General for Audit, Midwest
SUBJECT: Village Green Apartments
Multifamily Mortgagor Equity Skimming
Portage, Michigan
We completed a review of Village Green Apartments. The audit objective
was to determine whether the project's owners/management agent used the
project's operating funds to make loan repayments to the owners when
the project was not in a surplus cash position.
We selected Village Green for audit because the financial statements
indicated that project funds were distributed to the owners as loan
repayments when the project was not in a surplus cash position. To
evaluate the use of project funds, we reviewed HUD's monitoring reports,
check disbursement reports, physical inspection reports, and prior
audit reports. We also interviewed applicable HUD Grand Rapids Area
Office staff regarding the financial operations of the Project.
Village Green Apartments is a 168 unit project located in Portage,
Michigan. HUD insured the project for $5,293,900 under Section 221
(d)(4) of the National Housing Act. HUD endorsed the original mortgage
on October 20, 1980. Village Green Apartments, Ltd., a Michigan
Limited Partnership owns the project. The general partners are Meyer
C. Weiner and Joshua T. Weiner. Chessler Corporation, an identity
of interest company, manages the Project and is located at 200 Mall
Drive, Portage, Michigan.
We found that project funds were not distributed to the owners for loan
repayments. The payments were for management fees that the owners had
allowed to accrue in the project. The management fees were earned and
allowed by HUD. The owners/management agent properly maintained the
project and there were no outstanding notices of deferred maintenance.
Therefore, we concluded a detailed audit was not necessary.
If you have any questions, please contact me at (313) 353-7832.
.
Village Green Apts., Portage, MI
Published by the Department of Housing and Urban Development, Office of Inspector General on 1995-11-08.
Below is a raw (and likely hideous) rendition of the original report. (PDF)