Finding 41636 (2022-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2022

Accepted

2023-01-30

Audit: 40169

Organization: Reach Out II Apartments, Inc. (AR)

Auditor: Alexander Thompson Arnold PLLC

AI Summary

Issue: Reach Out II Apartments, Inc. failed to collect a required security deposit from a tenant.
Impacted Requirement: This non-compliance violates the Uniform Guidance, which mandates security deposits for all tenants.
Recommended Follow-Up: Implement stricter controls over the security deposit and move-in process to ensure compliance.

Finding Text

2022-001 Criteria:The Uniform Guidance requires HUD Projects to obtain security deposits from all tenants. Condition:Management of Reach Out II Apartments, Inc. did not obtain a deposit from a tenant who moved in during the year. Effect: Reach Out II Apartments, Inc. is not in compliance with a significant requirement of the Uniform Guidance. Cause: Reach Out II Apartments, Inc.?s controls related to obtaining security deposits were insufficient to prevent and detect the failure to obtain the required deposit. Questions Costs: None. Recommendations: We recommend that Reach Out II Apartments, Inc. put into place more strict controls over the security deposit and move-in process.

Corrective Action Plan

Name of Contact Person: Teri Zaner, CFO Management Response: Management is working with the Site Manager on instituting new controls to prevent the error from happening in the future. Planned Corrective Action: Going forward, management will be working with the Site Manager on refining controls to more timely detect and correct any issues. It is anticipated that this issue will be resolved by December 1, 2022.

Other Findings in this Audit

618078 2022-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.181	Supportive Housing for Persons with Disabilities	$930,100
14.856	Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation	$76,869