FULTON GARDENS CORPORATION

Findings reference number: 2024-001 Title and AL Number of Federal Program: Project Rental Assistance Contract, AL 14.157 Type of finding: Federal Award (Compliance) Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No. Criteria: The tenant security deposits bank account should have enough cash to cover the tenant security deposit liability and should be held in an interest bearing account. Condition: Review of the security deposit account showed that the balance as of December 31, 2024 was insufficient to cover the tenant security deposit liability and was not held in an interest bearing account. Cause: The Project had a shortfall of operational cash and used some funds from the security deposit account. The fees associated with an interest bearing bank account would outweigh the benefits of interest based on the size of the security deposit account. Effect: The Project may not be able to refund the security deposit for tenants moving out. Noncompliance code: M. Security deposits. Questioned costs: N/A. Reporting views of officials: Auditee agrees with the finding. Contract Number: 114-EE140 Context: The funds were withdrawn because of a shortfall of operating cash and need for necessary repairs to the property. Recommendation: Management must transfer enough funds to the security deposit account to cover the tenant security deposit liability. If possible, management should attempt to transfer the security deposit account to an interest bearing account. Auditee's Response: Auditee agrees with the finding and will replenish the money to the security deposit account as soon as possible. Management will also research the feasibility of finding a bank account that will pay sufficient interest to cover any fees charged. Completion date: 12.31.25