Finding 1219021 (2025-003)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 223(f) HUD Insured Mortgage Note Listing Number: 14.155 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A FAIN number and year: 800010775-2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The security deposit liability needs to be funded by a security deposit asset equal to or greater than the liability. Condition: As of November 30, 2025, the security deposit asset account was underfunded by $339. Questioned costs: None Context: Funds were not transferred to the security deposit cash account to fully cover the liability. Cause: The project did not have the controls in place to ensure the liability was fully covered at all times. Effect: The security deposit asset account was underfunded. Repeat Finding: N/A Recommendation: We recommend management ensure they have controls and processes in place to ensure the security deposit liability account is properly funded at all times. Views of the responsible official and planned corrective actions: No disagreements with the finding.