Finding 40079 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-04-26
Audit: 47410
Organization: Marion Street Apartments, Inc. (OR)
Auditor: Karen Smith

AI Summary

  • Core Issue: Security deposits were not refunded on time as required by HUD regulations.
  • Impacted Requirements: HUD Handbook 4350.3 mandates timely refunds or itemized statements for tenants.
  • Recommended Follow-Up: Management should ensure consistent adherence to refund procedures to meet HUD timelines.

Finding Text

Finding No. 2022-001; Federal Assistance Listing Number 99.999 Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Condition In connection with our lease file testing one out of one tenant files tested did not have a security deposit refunded timely. Cause Management does not consistently follow procedures to refund tenant security deposits within the time requirement established by HUD. Effect or Potential Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges. Questioned Costs N/A Context One out of one tenant files tested did not have security deposit refunded timely. Repeat Finding No Recommendation Management should follow its policies and procedures related to refunding of tenant security deposits to comply with the timeline required by HUD regulations. Auditor Noncompliance Code: N. Special Tests and Provisions; M. Security Deposits Finding Resolution Status: Resolved Views of Responsible Officials and Planned Corrective Actions Generally, security deposits are refunded timely unless there are unique circumstances. Management will follow appropriate procedures in refunding security deposits on a timely basis. Fiscal will work with property management department to notify them if a security deposit is outstanding after a tenant has moved in.

Corrective Action Plan

Finding No. 2022-001; Federal Assistance Listing Number 99.999 Statement of Condition: In connection with our lease file testing one out of one tenant files tested did not have a security deposit refunded timely. Corrective Action: Generally, security deposits are refunded timely unless there are unique circumstances. Management will follow appropriate procedures in refunding security deposits on a timely basis. Fiscal will work with property management department to notify them if a security deposit is outstanding after a tenant has moved in.

Categories

HUD Housing Programs Special Tests & Provisions

Other Findings in this Audit

  • 40080 2022-002
    Significant Deficiency
  • 45630 2022-003
    Significant Deficiency
  • 616521 2022-001
    Significant Deficiency
  • 616522 2022-002
    Significant Deficiency
  • 622072 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
99.999 Low Income Housing Preservation and Residential Homeownership Act of 1990 $776,248
14.195 Section 8 Housing Assistance Payments Program $129,486