Finding Text
Finding reference number: #2025-002 Assistance Listing (federal award identification number and year): Supportive Housing for the Elderly (Assistance Listing No. 14.157, 2011) Auditor non-compliance code: M – Security Deposits Finding resolution status: Cleared Universe population size: 12 months Statistically valid sample: 3 months Name of federal agency: Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $105 Was the sampling statistically valid: Yes Statement of condition of #2025-002: The Corporation did not maintain resident security deposits in an amount equal or greater than resident security deposits liabilities at all times during the year ended December 31, 2025. At December 31, 2025, the resident security deposit account was underfunded by $105. Criteria: Pursuant to the Regulatory Agreement, residents' security deposits should be funded in an amount which shall at all times equal or exceed the aggregate of all outstanding obligations. Effect or potential effect: Failure to fund resident security deposits could result in the inability of the Corporation to return security deposits to resident upon the termination of the resident's lease. Cause: The residual shortfall carried from the prior year was not fully eliminated by December 31, 2025. Recommendation: Management should ensure the security deposit account is adequately funded and transfer funds, if necessary, from the operating account to adequately fund the security deposit account. Reporting response: Management concurs. The shortfall was reduced from $557 at December 31, 2024 to $105 at December 31, 2025. The Corporation transferred $105 from the operating account to the resident security deposit account on September 17, 2026, fully funding the account. The security deposit account is reconciled to the tenant deposit ledger monthly as part of the close, and any variance is transferred in the same month.