Finding Text
2022-001: Tenant Security Deposits Condition: Current year testing noted that the security deposit account was still not being used and as a result the prior year findings have not been cleared. During the current year two tenants that the Project reported as having security deposits did not have them deposited into the security deposit account and one security deposit should have been refunded and was still in the account. Criteria: The Project is using tenants? security deposits for operations, not properly managing the individual interest-bearing accounts and not accounting for the money appropriately. Cause: The Project does not have the minimum deposit to cover potential damages or unpaid rent separated, and has money in the account but not properly documented in accordance with procedures as noted. Effect: Not in compliance with tenants? lease agreements as approved by HUD. Recommendation: Procedures should be in place and followed to ensure that the proper security deposit is documented, collected and deposited into the separately held interest bearing account upon move in and properly distributed upon move out. Management?s response: We concur with the findings and expect the accounting and project staff to review the list and make the necessary corrections.