Audit 369473

Finding Type: Immaterial noncompliance with major program requirements Significant deficiency in internal control over compliance Title and Assistance Listing Number of Federal Program 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects (Section 207/223(f)) Finding Resolution Status In Process Information on Universe and Population Size All security deposit refunds made during 2024 Sample Size Information Two security deposit refunds were tested Identification of Repeat Finding and Finding Reference Number N/A Criteria HUD requires the Corporation to refund the security deposit to tenants within 30 days of the move out. Statement of Condition The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. The security deposit was refunded to the tenant on the 58th day subsequent to their move out. This condition was also reported as an immaterial instance of noncompliance with major program requirements during 2023. Cause The Corporation failed to monitor the deposit refund requirements for the security deposits as specified by the regulatory agreement. Effect or Potential Effect The tenant did not receive their security deposit refund until 58 days after their move out. Auditor Noncompliance Code M Security Deposits Reporting Views of Responsible Officials Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Context During testing of move outs, one instance of security deposit noncompliance was noted. Recommendation Management should make necessary changes to internal controls over compliance so that security deposit refunds are made within 30 days of the tenant move out.Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Response Indicator None Completion Date December 31, 2025 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will monitor security deposit refunds in order to ensure refunds meet the regulatory agreement requirements.