Finding 61400 (2022-003)

2022-003 Tenant Security Deposits Condition: Tenant security deposits are not being reconciled on a monthly basis. Criteria: Tenant security deposits collected should be deposited into the security deposit bank account and recorded to the general ledger as a security deposit liability. While tenant security deposit forfeitures should be transferred to the operating account and recorded as a forfeiture in the general ledger. Cause: Tenant security deposits are not being reconciled on a monthly basis. As a result, errors in the record keeping and reconciling of tenant security deposits have occurred. Effect: Ineffective controls over record keeping and recording of security deposits impose an increased risk of inaccurate reporting and misappropriation. Recommendation: Controls over record keeping and recording of tenant security deposits should be strengthened with an increased emphasis on reconciling security deposit accounts to supporting documentation on a monthly basis.