Finding 1093587 (2024-002)

Finding 2024-002, Rent Deposits Criteria: The federal program 14.181 requires that all receipts of the project shall be deposited in the name of the project in a bank, and the funds must be used exclusively for the benefit of the project. Condition and Context: Resident rents collected by the Sponsor were not transferred to the Organization monthly. Cause: There was turnover in staff, and the new staff was not aware of the requirement. Effect: The Organization was not in compliance with program requirements. Identification as a repeat finding: Yes. Questioned costs: None. Recommendation: We recommend that the Organization’s sponsor transfer tenant rent to the Organization monthly. View of responsible officials: Management agrees and confirms resident rents collected by the Sponsor will be transferred to the Organization monthly. A catch-up entry will be made and monthly transfers will be setup and will be overseen by the Assistant Controller. The separate Financial Close and Compliance Checklist put in place for the Organization will include this process, and sufficient staff training will also be provided. Estimated completion date: March 2025