Finding Text
FINDING No. 2023-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: All security deposits for the year ended September 30, 2023. Sample Size Information: All security deposits for the year ended September 30, 2023. Identification of Repeat Finding and Finding Reference Number: No. Criteria: In accordance with HUD, the Project must hold tenant security deposits in a segregated interest bearing account and maintain a sufficient balance equal to the total security deposits collected from current tenants, plus accrued interest. Statement of Condition: The Project did not maintain sufficient funds equal to or exceeding the total security deposits collected from current residents. Cause: The Project’s security deposits liability exceeded its cash deposits by $6,980. Effect or Potential Effect: The Project would not have sufficient funds to satisfy its obligations to its tenants strictly using the security deposits account. Auditor Non-Compliance Code: M – Security Deposits Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: Management should implement procedures to ensure adequate funding of the security deposits account that equals or exceeds the corresponding security deposits liability. Response Indicator: Agree. Completion Date: 09/30/2024 Response: The Security Deposit liability is reconciled to the underlying report to ensure proper amounts are maintained. New procedures have been implemented to reconcile the Security Deposit Liability to cash funding.