Finding Text
Security Deposit Cash Account Condition: The security deposit bank account balance at June 30, 2025 was insufficient to cover the liability due to the tenants in occupancy. The security deposits liability exceeded the security deposits held in trust by $1,701 at June 30, 2025. Criteria: Per HUD regulations, maintaining a fully funded security deposit account helps to ensure that management will be able to make refunds to all tenants. Effect: This resulted in the tenant security deposit account being under funded by $1,701 as of June 30, 2025. Cause: Management failed to maintain the deposit balance as required. Recommendation: We recommend that the Project take the necessary steps to fully fund the security deposit account. Auditee’s Response: The Project has taken the necessary steps to fully fund the security deposit account as of the report date.