Finding Text
AL# 10.415 U.S. Department of Agriculture - Rural Development Questioned Cost: $3,210 Criteria ? Funds collected as a security deposit shall be kept in the name of the project, separate and apart from all other funds of the project in a trust account. The amount of this account shall always equal or exceed the aggregate of all outstanding obligations under that account. Condition ? The Project?s tenant security deposits cash account did not equal or exceed the tenant security deposit liability. Cause ? The entity switched management companies during the year and security deposits were still in the process of reconciliation as of year-end.Effects or Potential Effects ? The project was not in compliance with requirements set forth by Rural Development. Auditor?s Recommendation ? We recommend regular reconciliation and comparison of the security deposit liability account and the cash account. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.