Finding Text
Finding reference number: 2019-003
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: M - Security deposits
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $10,891
Statement of condition 2019-003: As of December 31, 2019, there was no segregated security deposit account and the liability of $10,891 was not properly funded.
Criteria: Pursuant to item 6(g) of the Regulatory Agreement, resident security deposits should be funded in a separate account in an amount not less than the amount of security deposits received from residents at all times.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement. Failure to fund security deposits could result in the inability of the Corporation to return security deposits to residents upon termination of the resident's lease.
Cause: Upon transition from prior management, a security deposit account was not established.
Recommendation: Management should fund the security deposit account and ensure that the liability is funded at all times.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and will fund the security deposit account in 2024.