Finding 503743 (2024-002)

Finding reference number: #2024-002 Assistance Listing title and number (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing 14.157, 1997 Auditor non-compliance code: M – Security Deposits Finding resolution status: Unresolved Universe population size: 12 months Sample size information: 1 month Noncompliance information: See statement of condition 2024-002 for noncompliance. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $1,487 Statement of condition # 2024-002: The Partnership did not maintain a cash account for residents' security deposits in an amount equal to or greater than the outstanding balance of the residents' security deposit liability. At June 30, 2024, the residents' security deposit cash account was underfunded by $1,487. Criteria: Pursuant to the Regulatory Agreement, residents' security deposits should be funded in a separate account in an amount which shall at all times equal or exceed the aggregate of all outstanding obligations. Effect: Failure to fund residents' security deposits could result in the inability of the Company to return security deposits to residents upon termination of the residents' leases. Cause: Management did not adequately monitor the balance of the residents' security deposits cash account throughout the year. Recommendation: Management should ensure the residents' security deposits cash account is adequately funded and transfer funds from the Property's operating cash account to adequately fund the residents' security deposits cash accounts. Completion date: N/A Management Response: Management concurs with the finding and recommendation. Management will ensure the residents' security deposits cash account is properly funded.