Core Issue: The Organization failed to maintain a security deposit cash account that meets regulatory requirements, resulting in an underfunded account by $438.
Impacted Requirements: Compliance with the regulatory agreement for security deposit cash accounts, which should equal or exceed the security deposit liability.
Recommended Follow-Up: Ensure funds are deposited to meet the liability and strengthen internal controls to prevent future noncompliance.
Finding Text
Finding Type - Immaterial noncompliance with major program requirements
Title and Assistance Listing Number of Federal Program - 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects
Finding Resolution Status - None
Information on Universe and Population Size - N/A
Sample Size Information - N/A
Identification of Repeat Finding and Finding Reference Number - N/A
Criteria - The Organization should deposit cash in their security deposit cash account in order to meet or exceed the security deposit liability account as required by the regulatory agreement.
Statement of Condition - The Organization did not comply with the regulatory agreement requirement to have a security deposit cash account that meets or exceeds the security deposit liability account.
Cause - Management's monitoring and review controls over tenant security deposits were not effective enough to ensure the security deposit cash account meets or exceeds the security deposit liability account.
Effect or Potential Effect The security deposit cash account is underfunded at December 31, 2023 by $438.
Auditor Noncompliance Code - M - Security Deposits
Context - The underfunded amount at December 31, 2023 represented approximately 3 percent of the total security deposit liability account balance.
Recommendation - The Organization should deposit funds in the security deposit cash account in order to meet its security deposit liability. The Organization should implement appropriate internal controls over compliance to ensure the security deposit cash account meets or exceeds the security deposit liability account.
Auditor's Summary of the Auditee's Comments on the Findings and Recommendations
Response Indicator - Agree
Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit funds to the security deposit cash account in order to meet the regulatory agreement requirement.
Categories
Procurement, Suspension & DebarmentSubrecipient MonitoringHUD Housing ProgramsInternal Control / Segregation of Duties