FAC Explorer

Finding 11005 (2023-001)

-
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-01-31
Audit: 14875
Organization: Lafayette House Elderly Housing, Inc. (MI)
Auditor: Pkf O'Connor Davies LLP

AI Summary

  • Core Issue: The security deposit account is underfunded by $4,756, violating the requirement to keep funds separate and equal to deposits collected.
  • Impacted Requirements: Regulatory agreement mandates that security deposits must be maintained separately and fully funded.
  • Recommended Follow-Up: Fund the account immediately and implement stronger controls to prevent future underfunding.

Finding Text

Information on the Universe Population Size 1 tenant security deposit cash account Section III – Federal Award Findings and Questioned Costs (continued) Sample Size Information 1 tenant security deposit cash account Identification of Repeat Finding Reference Number N/A Criteria The regulatory agreement requires that any funds collected as security deposits shall be kept separate from all other funds of the Entity and equal or exceed the security deposit balance collected. Statement of Condition Security deposit balance maintained by the Entity in the bank account was below the amount of residential tenant deposits received by the Entity. Cause The cause of the missing payments was due to management oversight. Effect or Potential Effect The security deposit fund is underfunded by a total of $4,756. Auditor Non-Compliance Code M- Security Deposits Questioned Costs There were no known questioned costs. Perspective The finding represents an isolated instance of management oversight. Repeat Finding No Recommendations Auditor recommends that the Entity fund the bank account immediately to fund the shortfall and create a better system of controls to ensure no future occurrences. Views of Responsible Officials See management corrective action plan

Corrective Action Plan

A. Comments on Finding and Recommendations Recommendation – Auditor recommends that the Entity fund the reserve immediately to make it current and create a better system of controls to ensure no future occurrences. Auditor notes deposit was made prior to issuance of the financial statements. No further action is required. B. Actions Taken or Planned Auditee agrees with the finding and has made an additional deposit of $6,000 to the security deposit bank account on July 24, 2023, in order to fully fund the account. The Entity has established a monthly review to prevent shortfalls in the future. The error occurred because a miscalculation by a new oversight employee.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $753,189