Finding Text
Finding Type:
- Immaterial noncompliance with major program requirements
- Significant deficiency in internal control over compliance
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 Projects (Section 207/223(f))
Finding Resolution Status - In process
Information on Universe and Population Size -All security deposit refunds made during 2023
Sample Size Information -A sample size of two security deposit refunds was determined based on the HUD audit guide.
Identification of Repeat Finding and Finding Reference Number - N/A - Not a repeat finding
Criteria - HUD requires the Corporation to refund the security deposit to tenants within 30 days of the move-out.
Statement of Condition - The Corporation failed to refund the security deposit to one tenant within 30 days of the tenant's move-out date. The security deposit was refunded to the tenant on the 44th day subsequent to move-out.
Cause - The Corporation’s internal controls over compliance failed to detect the security deposit that was not refunded within 30 days.
Effect or Potential Effect - Additional security deposit refunds may not meet HUD's requirements.
Auditor Noncompliance Code - M - Security Deposits
Reporting Views of Responsible Officials - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance.
Context - During testing of move-outs, one instance of security deposit noncompliance was noted.
Recommendation - Management should make the necessary changes to internal controls over compliance so that security deposit refunds are made within 30 days of a tenant's move-out date.
Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management acknowledged the error that occurred during the year ended December 31, 2023 and corrected the issue by refunding the security deposit. In addition, they have taken measures to improve internal controls over compliance.
Response Indicator - Agree
Completion Date - December 31, 2024
Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will monitor security deposit refunds in order to ensure refunds meet the Regulatory Agreement requirements.