Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT Department of Housing and Urban Development Finding 2025-001: Major Program: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 STATEMENT OF CONDITION One tenant file, out of four files reviewed, did not refund a security deposit within thirty days of the tenant moving out. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to refund the tenant’s security deposit within thirty days after the move out date. EFFECT OF CONDITION The tenant was not refunded their security deposit within thirty days of their move out. CONTEXT During audit fieldwork, four tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria and HUD lease requirements. Of the four tenant files examined, one tenant moved out during 2025. The tenant who moved out was not refunded their security deposit within thirty days of the move out date. CAUSE OF CONDITION Management mistakenly did not ensure that the security deposit was refunded within thirty days of the tenant moving out. RECOMMENDATION The auditor recommends implementing greater oversight over HUD tenant compliance and proper employee training on HUD move out procedures. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor tenant move outs to ensure security deposits are refunded within the thirty-day period specified by HUD and review the HUD move out procedures with their employees.