Finding Text
Security Deposits
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Section 8 – Lower Income Housing Assistance Program
Mortgage Insurance for the Purchase or Refinancing of Existing
Multifamily Housing Projects
Assistance Listing #: 14.195
14.155
Type of Finding:
Other Matters
Condition: We noted a refund was not provided to a tenant within 30 days after the tenant’s move-out
date.
Criteria or specific requirement: HUD requires security deposit refunds to be disbursed to the former
tenant and in the appropriate amount within 30 days of move-out. If no refund is given, the tenant
should receive an itemized listing of any unpaid rent, damages to the unit and any estimated cost for
repair.
Questioned Costs: None
Context: We noted a refund was not provided to a tenant within 30 days after the tenant’s move-out
date.
Cause: Management oversight.
Effect: The Corporation is not in compliance with HUD requirements.
Repeat Finding: No
Recommendation: To establish proper internal control over security deposit refunds, the Corporation
should design and implement the necessary procedures to ensure the move-out notifications are
provided to the accounting office in a timely manner and ensure the tenant's security deposit is
processed and refunded within 30 days of the move-out date.
Views of responsible officials and planned corrective actions: There is no disagreement with the
finding. Management will monitor future move-outs to ensure the security deposits are processed and
refunded within 30 days of the move-out date.