Finding 1106632 (2023-003)

2023-003 – Security Deposit Account Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Assistance Listing #: 14.157 Questioned Costs: None Type of Finding: Other Matters Condition: At December 30, 2023, the security deposit liabilities exceeded the balance of the security deposit cash account by $453. Criteria or Specific Requirement: The Project’s regulatory agreement with HUD requires that security deposits be maintained in a separate bank account which equals or exceeds the aggregate of all security deposit liabilities. Cause: Management oversight. Effect: The Project is not in compliance with its regulatory agreement. Repeat Finding: No Recommendation: We recommend management compare the security deposit cash account to the security deposit liability account on at least a monthly basis to ensure the asset is larger than the liability. Views of Responsible Officials and Planned Corrective Actions: Management agrees and will continue to monitor the security deposit balances to ensure they maintain compliance with the regulatory agreement.