Finding Text
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, HUD projects are required to establish and maintain at all times a fully funded
separate bank account for tenant security deposits collected.
Condition
As of June 30, 2024, management has not fully funded the tenant security deposits cash account.
The tenant security deposits cash account was underfunded by $3,370.
Cause
The tenant security deposits liability exceeds the tenant security deposits cash account by $3,370
as of June 30, 2024.
Effect or Potential Effect
Management commingled tenant security deposits with its operating cash and did not have
sufficient cash balance in the tenant security deposits cash account to cover the tenant security
deposits liability as of June 30, 2024.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
Management should transfer $3,370 from the operating account in order to fully fund the tenant
security deposits account.
Auditor Noncompliance Code:
D - Commingling of funds
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD requirement
for security funding. Funds have been transferred and will be maintained based on HUD
requirements in a separate account from operating funds.
Finding Resolution Status: Resolved.