Audit 402738

Finding 2025-001 – Insufficient Security Deposit Account Funding Program: 14.195 - Section 8 Project-based Cluster – Section 8 Housing Assistance Payments Program Information on Universe Population Size Security deposit tenant activity and bank account activity was reviewed throughout the audit period and at year end. Statement of Condition The security deposit liability was in excess of funds held in the security deposit cash account. Criteria The regulatory agreement requires that any funds collected as security deposits shall be held in an account which shall at all times equal or exceed the aggregate of all outstanding security deposit obligations. Effect or Potential Effect The security deposit funds held in the bank account were $1,536 less than the obligation. Cause Management attributes the shortfall to timing of transfer to the security deposit bank account from prior managing agent not being transferred to the proper account. Recommendations We recommend that the Entity transfer money to the account exceeding the obligation and maintain sufficient funding for the security deposit account going forward. Auditor Non-Compliance Code M – Security deposits Questioned Costs There were no known questioned costs. Reporting Views of Responsible Officials The auditee agrees with this finding and has made an additional deposit to the account to fund the shortfall. Response Indicator Agree Actions Taken or Planned on the Finding Auditee agrees with the finding and has made an additional deposit to the security deposit bank account to fund the account prior to the issuance of the financial statements and have established a monthly review to prevent shortfalls in the future.