Finding 46600 (2022-001)

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that security deposits be returned to the tenant within 30 days of the move-out date. Condition: Two of the eight security deposits tested were not returned to the tenant within the 30-day HUD requirement. Questioned costs: None Context: There were thirty-one tenants who had security deposits returned during 2022. For two out of eight tenants tested for security deposit move-outs, the Organization did not refund their security deposits on a timely basis. Cause: The Organization did not follow proper check disbursement procedures and the payment of the security deposit refund checks was delayed. Effect: The Organization did not properly implement check disbursement and moveout procedures, which resulted in a violation of the HUD 30-day security deposit refund requirement. Repeat Finding: No Recommendation: We recommend that the Organization follow proper procedures regarding security deposits for move-outs to ensure timely refunds. Views of responsible officials: There is no disagreement with the audit finding.