Finding 1208422 (2025-005)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-04-22

Audit: 399381

Organization: Jude's Place Apartments, Inc. (KY)

Auditor: DEMING MALONE LIVESAY & OSTROFF PSC

AI Summary

Core Issue: The Organization withdrew funds from the tenant security deposit account, resulting in insufficient cash to cover current liabilities.
Impacted Requirements: All tenant security deposits must be held in a separate interest-bearing account, which is not being properly tracked.
Recommended Follow-Up: Review and improve tracking controls for tenant deposits and ensure necessary transfers are made to fully fund the security deposit account.

Finding Text

Criteria: The Organization is required to hold all tenant security deposits in a separate interest bearing account. Statement of Condition: The Organization withdrew funds from the security deposit account in the current year leaving the amount of cash in the security deposit account lower than the total liability for current tenants’ security deposits. Cause of condition: The Organization does not keep an active listing to track the payment of tenant deposits and allocated interest earned on account. Effect of condition: Security deposit bank account is underfunded. Recommendation: The design of the current controls should be reviewed to ensure all tenant security deposits are properly tracked. Management should make transfers to the security deposit account to cover all deposits currently on hand. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure proper tracking of security deposits and will make the necessary transfer to fund the security deposit account.

Corrective Action Plan

Recommendation: The design of the current controls should be reviewed to ensure all tenant security deposits are properly tracked. Management should make transfers to the security deposit account to cover all deposits currently on hand. Action Taken: The management of Jude’s Place Apartments, Inc. accepts the recommendation of Deming, Malone, Livesay & Ostroff and, accordingly, management will implement procedures to ensure proper tracking of security deposits and will make the necessary transfer to fund the security deposit account.

Other Findings in this Audit

1208419 2025-002

Material Weakness Repeat
1208420 2025-003

Material Weakness Repeat
1208421 2025-004

Material Weakness Repeat
1208423 2025-006

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
14.181	SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES	$982,206