Finding 390867 (2023-001)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2023
Accepted
2024-04-01
Audit: 301572
Organization: Saugatucket Spring INC (RI)

AI Summary

  • Core Issue: The tenant security deposit account was underfunded as of June 30, 2023, violating HUD regulations.
  • Impacted Requirements: Security deposits must be kept in a separate account, distinct from operational funds.
  • Recommended Follow-Up: Implement internal controls for timely transfers of deposits and conduct monthly inspections of the deposit listings.

Finding Text

Finding 2023-001: Supportive Elderly Housing Section 202 Condition: The tenant security deposit account was underfunded as of June 30, 2023. Criteria: Security deposits for each tenant are required to maintained in a separate bank account, apart from those maintained for operations and development. Effect: The Partnership are no longer in compliance with the rules and regulations regarding tenant security deposits as required by HUD. Cause: The Partnership does not have internal controls in place to ensure that tenant security deposits are transferred on a timely basis from the operating bank account. The Partnership experienced high turnover during the year.Recommendation: The Partnership should design and implement internal controls to ensure that all security deposits are transferred in the required time period. Management should also conduct a monthly inspection of the security deposit listing. Views of Responsible Officials and Planned Corrective Actions: Management is in agreement with the auditors’ findings. Management has hired additional personnel to review all matters related to tenant compliance.

Corrective Action Plan

Corrective Action Plan United States Department of Housing and Urban Development Saugatucket Springs, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023 Name of Audit Firm: Damiano, Burk & Nuttall, P.C. 6 Blackstone Valley Place Suite 109 Lincoln, RI 02865 Audit period covered: 7/1/2022-6/30/2023 The findings from the June 30, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2023-001: Section 202 Project Rental Assistance—Assistance Listing # 14.157 Recommendation: The Partnership should design and implement internal controls to ensure that all security deposits are transferred in the required time period. Management should also conduct a monthly inspection of the security deposit listing. Action Taken: Management is in agreement with the auditors’ findings. Management has instructed all accounting personnel to review all matters related to tenant compliance. If the United States Department of Housing and Urban Development has questions regarding this plan, please call Frank Shea at (401) 296-3761.

Categories

HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 967309 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $261,485