Finding 503540 (2024-002)

2024-002 Security Deposit Liability Exceeds Security Deposit Cash Account Condition: The Project’s tenant’s security deposit liabilities exceed the amount of cash held in the security deposit account. Criteria: The Project is required to maintain a security deposit account that must at all times equal or exceed the aggregate of all outstanding obligations to tenants for refundable security deposits. Cause: Bank service charges totaling $180 were charged to the security deposit account causing the balance in the account to fall below its outstanding obligations. Effect: Noncompliance with requirements impose a risk of penalties and fines assessed by HUD. Recommendation: The Project should obtain banking accounts that do not assess monthly charges. The Project should also monitor the account to ensure that the security deposit account at all times equals or exceeds the aggregate of all outstanding obligations to tenants for refundable security deposits.