Finding 399907 (2023-003)

-
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-06-04

AI Summary

  • Issue: A tenant did not receive their security deposit refund within the required 30 days after moving out.
  • Requirements Impacted: HUD mandates that security deposit refunds must be issued within 30 days, along with an itemized list if no refund is given.
  • Recommended Follow-Up: Implement internal controls to ensure timely processing of move-out notifications and security deposit refunds.

Finding Text

Security Deposits Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Section 8 – Lower Income Housing Assistance Program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Assistance Listing #: 14.195 14.155 Type of Finding:  Other Matters Condition: We noted a refund was not provided to a tenant within 30 days after the tenant’s move-out date. Criteria or specific requirement: HUD requires security deposit refunds to be disbursed to the former tenant and in the appropriate amount within 30 days of move-out. If no refund is given, the tenant should receive an itemized listing of any unpaid rent, damages to the unit and any estimated cost for repair. Questioned Costs: None Context: We noted a refund was not provided to a tenant within 30 days after the tenant’s move-out date. Cause: Management oversight. Effect: The Corporation is not in compliance with HUD requirements. Repeat Finding: No Recommendation: To establish proper internal control over security deposit refunds, the Corporation should design and implement the necessary procedures to ensure the move-out notifications are provided to the accounting office in a timely manner and ensure the tenant's security deposit is processed and refunded within 30 days of the move-out date. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. Management will monitor future move-outs to ensure the security deposits are processed and refunded within 30 days of the move-out date.

Corrective Action Plan

Recommendation: To establish proper internal control over security deposit refunds, the Corporation should design and implement the necessary procedures to ensure the move-out notifications are provided to the accounting office in a timely manner and ensure the tenant's security deposit is processed and refunded within 30 days of the move-out date. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. Management will monitor future move-outs to ensure the security deposits are processed and refunded within 30 days of the move-out date.

Categories

HUD Housing Programs Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 399903 2023-001
    Material Weakness Repeat
  • 399904 2023-001
    Material Weakness Repeat
  • 399905 2023-002
    Material Weakness Repeat
  • 399906 2023-002
    Material Weakness Repeat
  • 399908 2023-003
    -
  • 976345 2023-001
    Material Weakness Repeat
  • 976346 2023-001
    Material Weakness Repeat
  • 976347 2023-002
    Material Weakness Repeat
  • 976348 2023-002
    Material Weakness Repeat
  • 976349 2023-003
    -
  • 976350 2023-003
    -

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $5.01M
14.195 Section 8 Housing Assistance Payments Program $1.21M