Finding Text
OTHER MATTERS
2023-001 SECURITY DEPOSITS
Grantor: U.S. Department of Agriculture
Award Name: Rural Rental Housing Loans
Award Year: 2023
Award Numbers: Various
CFDA Number: 10.415
Criteria: Tenant security deposit accounts must be fully funded and maintained in a separate bank
account.
Condition: During our audit testing, we noted that while the Project maintained a separate bank account
for tenant security deposits, it was not fully funded.
Cause: Tenant security deposits subledger is not reconciled with tenant security deposits bank account to
ensure account is fully funded.
Effect: Tenant security deposits bank account is underfunded.
Questioned Costs: None noted.
Recommendation: The Project should implement controls to ensure that the tenant security deposits
bank account is fully funded.
Management’s Views and Corrective Action Plan: Management has subsequently corrected this and
transferred tenant funds received for their security deposit from the operating bank account to the tenant
security deposits bank account to ensure it is fully funded.