Finding 504578 (2024-001)

Finding Type Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program 14.155 Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects (Section 207/223(f)) Finding Resolution Status Resolved Information on Universe and Population Size The Corporation had 12 move outs during the fiscal year. Sample Size Information A sample size of 2 move outs were tested for the year ended July 31, 2024. Identification of Repeat Finding and Finding Reference Number N/A not a repeat finding Criteria HUD requires the Corporation to refund the security deposit to tenants within 30 days of the move out. Statement of Condition The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Cause The Corporation failed to monitor the deposit refund requirements for the security deposits as specified by the regulatory agreement. Effect or Potential Effect Who tenants did not receive their security deposit refund until 45 and 70 days after their move out. Auditor Noncompliance Code M Security Deposits Reporting Views of Responsible Officials Management acknowledged the errors that occurred during the year ended July 31, 2024 and has taken measures to change their process of issuing refunds to reduce the likelihood of late refunds. Recommendation All security deposit refunds should be made within 30 days of the tenant move out. Response Indicator Agree Completion Date March 12, 2024 Response The security deposit has been refunded and management is currently reviewing internal controls over security deposit refunds to ensure all deposits are refunded timely.