Finding 499111 (2023-002)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD-Insured Mortgage Listing Number: 14.129 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Management is required to maintain tenant security deposits in a separate bank account in an amount adequate to cover the security deposit liability. Condition: The security deposit bank account balance was not adequate to cover the security deposit liability. Questioned costs: None Context: The security deposit bank account had a balance of $61,837 at December 31, 2023 which was less than the related security deposit liability which was $116,761. Cause: The security deposit account was not adequately funded. Effect: The security deposit account is inadequate to cover the security deposit liability. Repeat Finding: N/A Recommendation: Recommend management fund the security deposit account in an amount that is adequate to cover the security deposit liability. Views of responsible officials: There is no disagreement with the audit finding. Management will fund the security deposit account in an amount adequate to cover the security deposit liability.