Finding 541028 (2024-001)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2024
Accepted
2025-03-31
Audit: 350635
Organization: Plaza Esperanza INC (RI)

AI Summary

  • Core Issue: Tenant security deposits were underfunded as of June 30, 2024, violating HUD regulations.
  • Impacted Requirements: Security deposits must be kept in a separate bank account, distinct from operational funds.
  • Recommended Follow-Up: Implement internal controls for timely transfers of deposits and conduct monthly inspections of the security deposit listing.

Finding Text

Finding 2024-001: Supportive Elderly Housing Section 202 Condition: The tenant security deposit cash was underfunded as of June 30, 2024 Criteria: Security deposits for each tenant are required to be maintained in a separate bank account, apart from those maintained for operations and development. Cause: The Corporation does not have internal controls in place to ensure that tenant security deposits are transferred on a timely basis from the operating bank account. Effect: The Corporation is no longer in compliance with the rules and regulations regarding tenant security deposits are required by HUD. Recommendation: The Corporation should design and implement internal controls to ensure that all security deposits are transferred in the required time period. Management should also conduct a monthly inspection of the security deposit listing. Views of Responsible Officials and Planned Corrective Actions: Management is in agreement with the auditor’s findings. Management has hired additional personnel to review all matters related to tenant compliance.

Corrective Action Plan

Corrective Action Plan United States Department of Housing and Urban Development Plaza Esperanza, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2024 Name of Audit Firm: Damiano, Burk & Nuttall, P.C. 6 Blackstone Valley Place Suite 109 Lincoln, RI 02865 Audit period covered: 7/1/2023-6/30/2024 The findings from the June 30, 2024 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS—FEDERAL AWARD PROGRAMS AUDITS DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2024-001: Section 202 Project Rental Assistance—Assistance Listing # 14.157 Recommendation: The Corporation should design and implement internal controls to ensure that all security deposits are transferred in the required time period. Management should also conduct a monthly inspection of the security deposit listing. Action Taken: Management is in agreement with the auditor’s findings. Management has instructed all accounting personnel to review all matters related to tenant compliance. If the United States Department of Housing and Urban Development has questions regarding this plan, please call Frank Shea at (401) 296-3761.

Categories

HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1117470 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $165,059