Finding Text
Condition ? The security deposit liabilities of $20,052 exceeded the balance in the security deposit bank account of $18,496. There is a security deposit funding deficit of $1,556, resulting in an instance of noncompliance. (Questioned Costs ? $1,556) Criteria ? Under the HUD regulatory agreement, any funds collected as security deposits should be kept separate and apart from all other funds in an amount which shall at all times be equal to or exceed the aggregate balance of all outstanding obligations under said account. Cause ? The Organization did not ensure that tenant security deposit funds were not commingled with operating funds in accordance with the HUD regulatory agreement. Effect ? There is a possibility that, under the regulatory agreement, HUD shall invoke any remedies available by law to redress the breach or compel compliance by the Organization with the security deposit requirement. Recommendation ? We recommend that the Organization identify and implement policies and procedures to ensure that all security deposits received are directly deposited in the separate tenant deposit bank account in accordance with the HUD regulatory agreement. Auditor noncompliance code ? M ? Security deposits Reporting views of responsible officials ? The management agent, Quantum, is responsible for reconciling the security liability account with the security deposit funding. The Asset Management Director, Holly Vander Schaaf is responsible for reviewing the security deposit handling and accounting on a monthly basis. Concur or do not concur with this finding - Concur Agree or disagree with auditor recommendations ? Agree Completion date or proposed completion date - May 12, 2023 Actions taken or planned on the finding - The Organization will identify and implement policies and procedures to ensure that the security deposit bank account balance will at all times be equal to or exceed the aggregate balance of all outstanding security deposit liabilities.