Finding 573996 (2024-002)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-08-20
Audit: 364591
Organization: Community Housing, Inc. (OR)
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: Management did not refund a tenant's security deposit or provide an itemized list of charges within the required 30 days after move-out.
  • Impacted Requirements: This violates HUD Handbook 4350.3 occupancy requirements regarding timely security deposit refunds.
  • Recommended Follow-Up: Update policies and procedures to ensure compliance with the 30-day timeline for security deposit refunds.

Finding Text

Finding No. 2024-002; Federal Assistance Listing Number 14.157 Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Condition In connection with the procedures applied to a sample of 1 tenant that moved out of the project during the year, we noted 1 instance where management failed to refund the tenant security deposit and/or provide the tenant with an itemized list of charges deducted from the deposit within thirty days after the move-out date. Cause Management's policies with respect to move outs and security deposit refunds were not consistently followed. Effect or Potential Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges. The Property owes the tenant security deposit back to the tenant. Questioned Costs N/A Context In connection with our lease file testing one out of one move-out tenant files tested did not maintain a move out inspection on file nor provide written notice of any deductions from the tenant's security deposit timely. Identification as a Repeat Finding Yes: 2023-003 Recommendation Management should change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulations. Auditor Noncompliance Code: M - Security Deposits for REAC Finding Resolution Status: Resolved Views of Responsible Officials and Planned Corrective Actions: REACH has policies in place to ensure that the return of tenant security deposits are done in a timely manner. Staffing shortages at the Property had an impact on the timeliness of the return of security deposits. As new staff are brought onboard training is provided and training is provided to on-site staff to ensure that the return of security deposits are being completed and properties are in compliance. Management will continue to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.

Corrective Action Plan

Federal Award Findings and Questioned Costs Item 2024-002 Name of Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Supportive Housing for the Elderly (Section 202) Program Federal Assistance Listing: Number 14.157 Recommendation: Management should change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulations. Action Taken: REACH has policies in place to ensure that the return of tenant security deposits are done in a timely manner. Staffing shortages at the property had an impact on the timeliness of the return of security deposits. As new staff are brought onboard training is provided and training is provided to on-site staff to ensure that the return of security deposits are being completed and properties are in compliance. Management will continue to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 573995 2024-001
    Significant Deficiency Repeat
  • 573997 2024-004
    Significant Deficiency
  • 573998 2024-005
    Significant Deficiency Repeat
  • 573999 2024-001
    Significant Deficiency Repeat
  • 574000 2024-002
    Significant Deficiency Repeat
  • 574001 2024-004
    Significant Deficiency
  • 574002 2024-005
    Significant Deficiency Repeat
  • 574003 2024-003
    Significant Deficiency Repeat
  • 1150437 2024-001
    Significant Deficiency Repeat
  • 1150438 2024-002
    Significant Deficiency Repeat
  • 1150439 2024-004
    Significant Deficiency
  • 1150440 2024-005
    Significant Deficiency Repeat
  • 1150441 2024-001
    Significant Deficiency Repeat
  • 1150442 2024-002
    Significant Deficiency Repeat
  • 1150443 2024-004
    Significant Deficiency
  • 1150444 2024-005
    Significant Deficiency Repeat
  • 1150445 2024-003
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $750,000
14.157 Supportive Housing for the Elderly $105,207