Finding Text
2024-002 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 $180 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 obtain banking accounts that do not assess monthly charges. The Project
should also 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.