Finding 522763 (2024-001)

Finding Reference Number: 2024-01 Title and CFDA Number of Federal Program: Section 202 Capital Advance and Project Assistance Rental #14.157 Type of Finding: Financial Statement and Federal Award Finding Finding Resolution Status: Unresolved Information on Universe Population Size: n/a Sample Size Information: n/a Identification of Repeat Finding and Finding Reference Number: Not applicable Criteria: The HUD regulatory agreement states that any funds collected as security deposits should be kept in a separate interest bearing account, to the extent required by state or local law, and in an amount which shall, at all times, equal or exceed the aggregate of all outstanding obligations under said account. Statement of Condition: During the year ended September 30, 2024 tenant security deposit liabilities exceeded the amount of tenant security deposits on hand. Cause: Controls were not in place to ensure that tenant security deposits are equal to or exceed tenant security deposit obligations. Effect or Potential Effect: The project is not in compliance with the HUD regulatory agreement. Auditor Non-Compliance Code: M - Security deposits Questioned Costs: $509 Reportable Views of Responsible Officials: Management is in agreement with the finding, and will establish controls to ensure that tenant security deposits equal to or exceed tenant security deposit obligations. Context: Not applicable Recommendation: We recommend that management implement policies and procedures necessary to ensure that the tenant security deposits are always equal to or greater than the tenant security deposit liabilities. Response Indicator: Agree Completion Date: 9/30/2025 Response: Management is in agreement with the finding, and will establish controls to ensure that tenant security deposits equal to or exceed tenant security deposit obligations.