Finding Text
Statement of Condition: The Project is required by HUD to follow Minnesota State laws to either refund tenant
security deposits or notify the tenant of a balance owed in excess of the security deposit within 21 days of the
tenant moving out. Of the two units tested, the Project did not refund one tenant their security deposit within
21 days of move-out as required by HUD and the State of Minnesota.
Criteria: The Project is required by HUD and the State of Minnesota to either refund the tenant security deposit
or to notify the tenant of the balance owed in excess of the security deposit within 21 days of the tenant moving
out.
Effect: The Project is not in compliance with the HUD or State of Minnesota requirements for tenant security
deposit refunds.
Cause: The Project returned the security deposit during 2023; however, it failed to refund one tenant their
security deposit within 21 days of the tenant moving out of the Project.
Questioned Costs: None
Recommendation: We recommend that management review the HUD and State of Minnesota security deposit
requirements with its staff and provide its staff with the proper training regarding these requirements.
Views of Responsible Officials: The Project agrees that it did not refund the tenant their security deposit within
21 days of move-out.
Auditor’s Summary of Auditee’s Comments: The Project did not refund the tenant their security deposit within
21 days of move-out. The Project agrees that it did not refund the tenant their security deposit within 21 days
of move-out.
Management’s Response: The Project agrees that it did not refund the tenant their security deposit within 21
days of move-out. We have discussed and reviewed the HUD and State of Minnesota security deposit
requirements with our staff. The staff understands the 21-day requirement and will process security deposit
refunds or notify the tenant of the balance owed in excess of the deposit within 21 days of the tenant moving
out.