Finding 1104699 (2023-002)

Finding No. 2023-002; Underfunding of security deposit account Condition As of September 30, 2023, management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $10,665. 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 September 30, 2023. Questioned Costs $ 10,655. Context 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. Identification as a Repeat Finding No Recommendation Management should transfer $10,655 from the operating account in order to fully fund the tenant security deposits account. Auditor Noncompliance Code N – Special Tests and Provisions Finding Resolution Status: In process Reporting Views of Responsible Officials The Corporation agrees with the finding and the auditor's recommendations have been adopted.