Finding 394989 (2023-001)

Requirement

Questioned Costs

Year

2023

Accepted

2024-04-29

Audit: 304898

Organization: Epiphany Housing, Inc. (FL)

Auditor: Davis Group P A

AI Summary

Answer: The Organization failed to maintain sufficient funds in security deposit accounts to meet liabilities.
Trend: This issue indicates a pattern of using security deposit funds for operational expenses, which is against guidelines.
List: Immediate action is needed to replenish security deposit accounts and ensure compliance with HUD guidelines.

Finding Text

Criteria: The resident’s security deposits are to be maintained in separate, interest-bearing bank accounts with cash on hand amounts equal to or in excess of security deposits liabilities. Condition and context: The Organization did not have the necessary funds in the security deposit bank accounts to cover the security deposit liabilities. Effect: The Organization is not in compliance with the HUD guidelines for maintaining resident security deposits. Cause: The Organization funded operations at times throughout fiscal year 2023 using security deposit funds.

Corrective Action Plan

The Organization should fund the security deposit account immediately and cease using these funds for operations. In acknowledgement of the seriousness of the issue (security deposit funds had been moved to the operating account), a new control system has been established for a more thorough review of security deposit accounts. Furthermore, the Controller is no longer with the management company.

Other Findings in this Audit

971431 2023-001

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Programs in Audit

ALN	Program Name	Expenditures
14.155	Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects	$2.05M
14.195	Section 8 Housing Assistance Payments Program	$598,376