Finding Text
SECTION II - FINANCIAL STATEMENT FINDINGS
None Noted.
SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Supportive Housing for the Elderly – Section 202
CFDA #14.157
Finding 2023-1 Inadequate Controls over Maintaining Adequate Cash Held in the Security Deposit Bank Account
Finding Resolution Status: Resolved
Information on Universal Population Size: One instance Sample Size: N/A
Identification of Repeat Finding and Finding Reference Number: 2022-1
Noncompliance Information: The Corporation is not in compliance with the HUD Regulatory Agreement due to the Tenant Security Deposit bank account being underfunded in the amount of $56.
Questioned Costs: N/A
Criteria: In accordance with the Regulatory Agreement the Corporation shall at all times maintain a balance in the security deposit bank account that is equal to or exceeds the aggregate of all outstanding tenant security deposit obligations.
Condition: Due to inadequate controls over tenant security deposits, the Corporation did not maintain the required balance in the security deposit bank account to meet the current obligations. The security deposit liability was $9,499 as of June 30, 2023 and the security deposit cash balance was $9,443 as of June 30, 2023. The security deposit cash account was underfunded by $56 as of June 30, 2023.
Cause: Unknown
SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED)
Finding 2023-1 Inadequate Controls over Maintaining Adequate Cash Held in the Security Deposit Bank Account (Continued)
Effect: The Corporation has inadequate cash available for the current outstanding obligations under the tenant security deposit agreements and is not in compliance with the HUD Regulatory Agreement.
Auditor’s Recommendation: The Corporation should fund the tenant security deposit bank account in an amount equal to or greater than the amount of tenant security deposits outstanding immediately. The Corporation should also implement policies and procedures to prevent the tenant security deposit bank account from falling below the total amount of tenant security deposits outstanding.
Auditor Non-Compliance Code: M – Security Deposits
FHA/Contract Number: 064-EE100
Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The Auditee has resolved this finding as of July 31, 2023, by depositing funds into the Security Deposit Bank Account in order to restore the balance to a sufficient amount to cover tenant security deposits on hand. The Auditee will be monitoring security deposits on a monthly basis in the future.
Reporting Views of Responsible Officials: The Security Deposit account was underfunded by $56. This was an oversight when reviewing security deposit balances against bank account balances at fiscal year end.
Response Indicator/Agree or Disagree with auditor Recommendations: Agree
Completion Date or Proposed Completion Date: July 31, 2023
Response/Corrective Actions Taken or Planned on the Finding: At the end of July, 2023, security deposits held on behalf of tenants were $9,206 and funds held in reserve at the bank were $9,442.80. August security deposits held on behalf of tenants were again $9,206 and funds held in reserve at the bank were $9,442.80. We will continue to monitor this on a monthly basis.
Contact Person: Janet Sanderford