Finding 2361 (2023-001)

Significant Deficiency
Requirement
M
Questioned Costs
$1
Year
2023
Accepted
2023-11-25
Audit: 4061
Organization: Gwinnett Christian Terrace LLC (GA)

AI Summary

  • Core Issue: The security deposit account is short by $17,725, violating HUD regulations.
  • Impacted Requirements: A separate bank account for security deposits must always meet or exceed the total deposits collected.
  • Recommended Follow-Up: Transfer $17,725 to the account and regularly monitor it to ensure compliance.

Finding Text

Statement of Condition: Transfer was made out of the security deposit account. At June 30, 2023 the resident security deposit account did not equal or exceed the deposits collected from residents by $17,725.; Criteria: Chapter 2 of the HUD Handbook 4370.2 indicates that, when the Regulatory Agreement allows the receipt of security deposits, a separate bank account should be established to maintain these funds. The balance of the account must not at any time be less than the aggregate of all outstanding obligations under the account for security deposits.; Effect or Potential Effect: The Company is not in compliance with the terms of the Regulatory Agreement; Cause: The Company did not transfer sufficient funds to the security deposit account in order to equal or exceed the liability listing; Recommendation: The Company should transfer $17725 to the security deposit account and closely monitor the liability listing to ensure that the asset account is adequately funded.; Actions Taken or Planned on the Finding: Funds were deposited, and the Company will monitor and make sure the account is always funded.

Corrective Action Plan

Thesecurity deposit account was not fully funded until August of 2023. At June 30, 2023, the resident security deposit account did not equal or exceed the deposits collected from residents by $17725. (1) Comments on the Finding and Each Recommendation - The Company agrees with the finding and recommendation.; (2) Actions Taken on the Finding - The Company transferred $20000 to the security deposit account and will closely monitor the liability to ensure that the asset account is adequately funded. No further action required.

Categories

Questioned Costs HUD Housing Programs

Other Findings in this Audit

  • 578803 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $9.55M
14.195 Section 8 Housing Assistance Payments Program $1.37M