Finding Text
Finding #2022-001: Section 223(a)(7) HUD Insured Loan, CFDA 14.135 (AAMHA Western Hills, LLC HUD Project No. 115-35888) and Section 223(f) HUD Insured Loan, CFDA 14.155 (AAMHA Cypress Cove, LLC HUD Project No. 115-11254 and AAMHA Calcasieu, LLC HUD Project No. 115-11280). Type of Finding: Significant deficiency. The security deposit liability account was greater than the security deposit asset account for three operating properties (AAMHA Western Hills, LLC, AAMHA Cypress Cove, LLC and AAMHA Calcasieu, LLC). See Section II for more information. Finding #2022-001: Section 223(a)(7) HUD Insured Loan, CFDA 14.135 (AAMHA Western Hills, LLC HUD Project No. 115-35888) and Section 223(f) HUD Insured Loan, CFDA 14.155 (AAMHA Cypress Cove, LLC HUD Project No. 115-11254 and AAMHA Calcasieu, LLC HUD Project No. 115-11280) Type of Finding: Significant Deficiency Condition: The security deposit liability account was greater than the security deposit asset account for three operating properties (AAMHA Western Hills, LLC, AAMHA Cypress Cove, LLC and AAMHA Calcasieu, LLC). Criteria: The HUD regulatory agreement requires the security deposit asset account exceed the security deposit liability account at all times. Questioned Costs: $65,358 Effect: The Company is in violation of the terms of the HUD Regulatory Agreement governing security deposits. Cause: Operating costs Repeat Finding: No (AAMHA Western Hills, LLC and AAMHA Cypress Cove, LLCYes (AAMHA Calcasieu, LLC) Recommendation: We recommend management review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. Management?s Comment: Management is in agreement with finding and will review Regulatory agreement. Management transferred the funds to cover the underfunding of the security deposit asset account for the operating property. Management has re-evaluated the property management company due to the underfunding of the security deposit account and has plans to hire a new management company effective July 1, 2023. Auditor?s Comment: On April 3, 2023, $15,079 was transferred to the security deposit asset account for AAMHA Western Hills, LLC. On March 20, 2023, $30,413 was transferred to the security deposit asset account for AAMHA Cypress Cove, LLC. On March 14, 2023, $19,866 was transferred to the security deposit asset account for AAMHA Calcasieu, LLC. Finding 2022-001 cleared