Finding 599422 (2022-001)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-04-12
Audit: 18813
Organization: Winter Grove, Inc. (CT)
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: The tenant security deposit cash account was not fully funded due to a bank error, leading to insufficient cash to cover liabilities.
  • Impacted Requirements: This situation violates HUD guidelines requiring a fully funded separate account for tenant security deposits.
  • Recommended Follow-Up: Transfer $6,007 from the operating account to fund the security deposits and consolidate accounts into one interest-bearing account, with monthly reconciliations.

Finding Text

CFDA 14.157 Supportive Housing for the Elderly (Section 202) Finding No. 2022-001 Statement of Condition During the year ended 2022, due to a situation with the bank, the security deposit cash account was not fully funded during various times throughout the year. Cause The bank erroneously transferred dormant account balances as escheated funds to the State of Connecticut in the name of the tenant. Effect or Potential Effect Management did not have sufficient cash balance in the tenant security deposit cash account to cover the security deposit liability as of December 31, 2022. Questioned Costs None Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Auditor Noncompliance Code: M - Security deposits Recommendations 2022-001-a Management should transfer $6,007 from the operating account in order to fully fund the tenant security deposits account. 2022-001-b Management should consolidate the individual security deposit accounts into one interest-bearing account in the name of the Project. The account should also be reconciled on a monthly basis to ensure proper reporting of the activity and account balances. Views of Responsible Officials and Planned Corrective Actions TBD

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

  • 22980 2022-001
    Significant Deficiency Repeat
  • 22981 2022-001
    Significant Deficiency Repeat
  • 599423 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $210,910