Finding Text
Criteria Audits of financial statements of HUD projects are required to deposit security deposit funds received from tenants in a separate bank account, apart from all other funds of the Project. Condition The security deposits received for 2 tenants was not deposited or transferred to the security deposit bank account. Cause The security deposits were deposited into the operating account and the funds were not transferred to the security deposit account. Questioned Costs None noted. Effect The Organization is noncompliant with the requirements of HUD. Recommendation The Organization should transfer the funds from the operating account to the security deposit account. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.