Finding Text
Finding reference number: 2024-001
Assistance Listing (Federal award identification number and year): Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 (Project identification number 074-11110 and 2017)
Auditor non-compliance code: M - Security Deposits
Finding resolution status: Resolved
Universe population size: N/A
Sample size information: N/A
Statistically valid sample: No
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $524
Statement of condition 2024-001: The resident security deposit account did not have adequate funds to cover the security deposits collected at September 30, 2024.
Criteria: Pursuant to Section 12 of the Regulatory Agreement, resident security deposits are required to 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 the security deposit account could result in the inability of the Corporation to return security deposits to residents upon termination of a resident's lease.
Cause: The resident security deposit account did not have adequate funds to cover the security deposits collected at September 30, 2024 due to a security deposit being deposited to the operating account during the year ended September 30, 2024 but not transferred to the security deposit account.
Recommendation: Management should reconcile the security deposit listing on a monthly basis and transfer funds from the operating cash account to ensure the resident security deposit account is adequately funded and collect the security deposit at the time of resident move-in.
Management's response: Agree. On October 22, 2024, management transferred $524 from the operating cash account to fully fund the security deposit account.