2025-002 Security Deposit Liability Exceeds Security Deposit Cash Account Condition: The Project’s tenant’s security deposit liabilities exceed the amount of cash held in the security deposit account. Criteria: The Project is required to maintain a security deposit account that must at all times equal or exceed the aggregate of all outstanding obligations to tenants for refundable security deposits. Cause: Bank service charges totaling $45 were charged to the security deposit account causing the balance in the account to fall below its outstanding obligations. Effect: Noncompliance with requirements impose a risk of penalties and fines assessed by HUD. Recommendation: The Project should monitor the account to ensure that the security deposit account at all times equals or exceeds the aggregate of all outstanding obligations to tenants for refundable security deposits.
2025-003 Record Keeping of Tenant Files Condition: Tenant files are not being completed based on compliance requirements of HUD. Criteria: Tenant files should be maintained to ensure all compliance requirements of HUD are completed timely and appropriately. Cause: Tenant files are not being maintained with complete and accurate information. Effect: Noncompliance with requirements impose a risk of penalties and fines assessed by HUD. Recommendation: Controls over record keeping and maintaining tenant files should be strengthened with an increased emphasis on timely and appropriately documenting all compliance requirements of HUD.
2025-004 Timeliness of Required Deposits Condition: The Project was delinquent funding the Reserve for Replacement account. Criteria: HUD regulations require monthly deposits into the Reserve for Replacement account in accordance with the Capital Advance Program (CAP) Regulatory Agreement. Cause: The Project did not consistently transfer monthly deposits into Reserve for Replacement account. Effect: The Project’s Reserve for Replacement account was underfunded as of June 30, 2025 by $900. Recommendation: The Project should deposit, on a monthly basis, the required amount per the CAP regulatory Agreement.