Finding Text
Finding No. 2022-003; Federal Assistance Listing Number 14.157 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. Condition As of December 31, 2022 management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $1,142 Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $1,142 as of December 31, 2022.. Effect or Potential Effect Management commingled tenant security deposits with its operating cash and did not have sufficient cash balance in the tenant security deposits cash account to cover the tenant security deposits liability as of December 31, 2022. Questioned Costs N/A Context Security deposit account is underfunded by $1,142. Identification as a Repeat Finding No Recommendation Management should transfer $1,142 from the operating account in order to fully fund the tenant security deposits account. Auditor Noncompliance Code: N-Special tests and provisions for Uniform Guidance; M-Security deposits Finding Resolution Status: Unresolved Views of Responsible Officials and Planned Corrective Actions: The difference of $1,142 primarily relates to what is showing as delinquent security deposits. Upon further review, Fiscal discovered that $402 of one tenant?s and $269 of another tenant?s security deposits were duplicated. The community manager will do a ledger adjustment for these instances. A third tenant?s deposit was never collected in 2019 and $323 of this deposit is to be reversed. Only $353 is truly outstanding. Fiscal asked the Maples I community manager to attempt to collect $303 SD ($353 less $50 paid) in 2023. Going forward, security deposits receivable will be reviewed monthly. Fiscal will work with property management department to notify them if a security deposit is outstanding after a tenant has moved in.