Property manager & security deposit

[Nancy Sathre-Vogel]

I'm hoping you can help me sort this out, as I have no idea where to go. 

I had a property manager that I loved, but she retired and sold her accounts to another person. The new person was a nightmare in many regards, so I fired her a month ago. I will eventually hire a new manager, but am taking care of things on my own for now. 

So - one of my tenants is moving out in a few days. I just now got the paperwork from the property manager, and she sent me a check for the security deposits for our other two houses, but not for the one that is being vacated now. That particular tenant was late with her rent nearly every month, but she never paid the late fees. 

Now, the property manager kept the entire security deposit to pay the late fees and didn't turn any of it over to me. Is that legit? Can she do that? I know the security deposit can be used to cover unpaid rent, but it seems really off for her to just keep the entire deposit to cover fees that she didn't collect over the past year. I wasn't aware the tenant was paying late every month until recently.

Ideas?