Audit 321845

Statement of Condition In connection with the procedures applied to a sample of 1 tenant that moved out of the Project during the year, we noted 1 instance where management failed to refund the tenant security deposit and/or provide the tenant with an itemized list of charges deducted from the deposit within thirty days after the move-out. Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Questioned Costs None Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits. Cause Property management informed the accounting staff of the move out, however due to a clerical error, the check was not issued within the 30 days of the tenant having moved out. Recommendation Management should ensure its policies and procedures related to refunding of tenant security deposits are followed and comply with the thirty-day timeline required by HUD regulations. Auditor Noncompliance Code: N - Special tests and provisions Finding Resolution Status: In process. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and will implement the auditor's recommendations. The recommendation, if properly implemented, should prevent this condition from arising again. Action 1-The residence director, building office staff, and accounting staff will be informed of the HUD requirements regarding the timely refund of security deposits. Action 2-The residence director and building office staff will immediately notify the accounting staff of all move outs by email so that a security deposit refund check can be promptly issued. Action 3-The asset management staff will review the accounts payable aging on a weekly basis to ensure that all security deposit refund checks have been issued.

Statement of Condition In connection with the procedures applied to a sample of 1 tenant that moved out of the Project during the year, we noted 1 instance where management failed to refund the tenant security deposit and/or provide the tenant with an itemized list of charges deducted from the deposit within thirty days after the move-out. Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Questioned Costs None Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits. Cause Property management informed the accounting staff of the move out, however due to a clerical error, the check was not issued within the 30 days of the tenant having moved out. Recommendation Management should ensure its policies and procedures related to refunding of tenant security deposits are followed and comply with the thirty-day timeline required by HUD regulations. Auditor Noncompliance Code: N - Special tests and provisions Finding Resolution Status: In process. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and will implement the auditor's recommendations. The recommendation, if properly implemented, should prevent this condition from arising again. Action 1-The residence director, building office staff, and accounting staff will be informed of the HUD requirements regarding the timely refund of security deposits. Action 2-The residence director and building office staff will immediately notify the accounting staff of all move outs by email so that a security deposit refund check can be promptly issued. Action 3-The asset management staff will review the accounts payable aging on a weekly basis to ensure that all security deposit refund checks have been issued.