Finding Text
Finding No. 2023-003; Federal Assistance Listing Number 14.157
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws.
Condition
In connection with our lease file testing one out of one move-out tenant files tested did not have a security deposit refunded timely or a move out inspection on file.
Cause
Management does not consistently follow procedures to refund tenant security deposits within the time requirement established by HUD and maintain move out inspections on file.
Effect or Potential Effect
Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges.
Questioned Costs
N/A
Context
In connection with our lease file testing one out of one move-out tenant files tested did not refund a security deposit timely or maintain a move out inspection on file.
Identification as a Repeat Finding
No
Recommendation
Management should follow its policies and procedures related to refunding of tenant security deposits to comply with the timeline required by HUD regulations.
Auditor Noncompliance Code: N - Special tests and provisions for Uniform Guidance
M - Security Deposits
Finding Resolution Status: Resolved
Views of Responsible Officials and Planned Corrective Actions:
REACH has policies in place to ensure that move out inspections and the return of tenant security deposits are done in a timely manner. Staffing shortages at the property had an impact on the timeliness of the move out inspection and the return of security deposits. As new staff are brought onboard training is provided and additional training will be provided to on-site staff to ensure that the inspections and the return of security deposits are being completed and properties are in compliance.