Finding Text
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for the Elderly (Section 202) Assistance Listing Number: 14.157 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Condition: As of December 31, 2025 management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $7,581. Cause: The tenant security deposits liability exceeds the tenant security deposits cash account by $7,581 as of December 31, 2025. Effect or potential effect: Management commingled tenant security deposits with its operating cash and did not have sufficient cash balance in the tenant security deposits cash account to cover the tenant security deposits liability as of December 31, 2025. Question costs: $7,581 Context: N/A Identification as a repeat finding: yes Recommendation: Management should transfer $7,581 from the operating account in order to fully fund the tenant security deposits account. Compliance Code: M. Security deposits Finding Resolution status: Resloved Reporting Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation. The transfer amount was understated, resulting in the tenant security deposit account being underfunded Management corrected the deficiency by transferring $7,581 from the operating account to fully fund the tenant security deposit account on January 14, 2026. Management has implemented enhanced reconciliations of tenant security deposits to ensure the security deposit account remains fully funded and accurate going forward.