Audit 19875

S3800-010: Finding Reference Number 2022-001 (Material Weakness) S3800-011: Program Information Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Federal Agency: Department of Housing and Urban Development (HUD) Assistance Listing #: 14.155 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria The regulatory agreement requires that the Organization?s books and records are maintained in accordance with HUD guidelines and generally accepted accounting principles. S3800-030: Statement of Condition Several misstatements were identified by the auditor in the unaudited financial statements and accounts of the Organization. S3800-032: Cause The Organization lacks adequate internal controls to ensure that books and records are kept accurately and completely. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement requirement to maintain accurate and complete books and accounts. S3800-035: Auditor Non-Compliance Code S ? Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context On the general ledger, various accounts such as rent, vacancies, and escrow accounts did not tie to supporting documentation. The Organization did not record the prior year audit adjusting entries as well due to which the unadjusted net assets did not roll forward correctly from prior year. S3800-080: Recommendation The Auditor recommends the Organization follows their policies and procedures to ensure that accounting records are kept accurate and complete, and a responsible official should review and sign off on the monthly financial statements. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2023 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-002 (Significant Deficiency) S3800-011: Program Information Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Federal Agency: Department of Housing and Urban Development (HUD) Assistance Listing #: 14.155 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria HUD Form-9250, Funds Authorizations, requires the Organization to deposit $1,842 into the replacement reserve account on a monthly basis. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended December 31, 2022 federal award program, we noted the Organization failed to make the required monthly deposits into the reserve for replacement account for all twelve months. The Organization deposited monthly $1,796 as opposed to the approved $1,842. S3800-032: Cause The Organization deposited the prior required monthly amount into the reserve for replacement account. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement to make required monthly deposits into the reserve for replacement account. S3800-035: Auditor Non-Compliance Code: N ? Reserve for replacements deposits S3800-040: Questioned Costs $868 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization deposited $21,236 onto the reserve for replacement account during the year ended December 31, 2022. The Organization was required to deposit $22,104 for the year. Per Missouri Housing Development Commission (HUD?s designee), the Organization was required to increase the monthly deposit to the reserve for replacement account from $1,796 to $1,842 effective June 1, 2019. The $868 questioned costs only accounts for the current fiscal year underfunding. S3800-080: Recommendation The Organization should deposit the shortfall of $868 into the reserve for replacement account, as well as the shortfall for 2019, 2020, and 2021, as soon as possible and ensure the process is being followed to deposit and reconcile the reserve for replacement account on a monthly basis. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2023 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-001 (Material Weakness) S3800-011: Program Information Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Federal Agency: Department of Housing and Urban Development (HUD) Assistance Listing #: 14.155 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria The regulatory agreement requires that the Organization?s books and records are maintained in accordance with HUD guidelines and generally accepted accounting principles. S3800-030: Statement of Condition Several misstatements were identified by the auditor in the unaudited financial statements and accounts of the Organization. S3800-032: Cause The Organization lacks adequate internal controls to ensure that books and records are kept accurately and completely. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement requirement to maintain accurate and complete books and accounts. S3800-035: Auditor Non-Compliance Code S ? Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context On the general ledger, various accounts such as rent, vacancies, and escrow accounts did not tie to supporting documentation. The Organization did not record the prior year audit adjusting entries as well due to which the unadjusted net assets did not roll forward correctly from prior year. S3800-080: Recommendation The Auditor recommends the Organization follows their policies and procedures to ensure that accounting records are kept accurate and complete, and a responsible official should review and sign off on the monthly financial statements. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2023 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-002 (Significant Deficiency) S3800-011: Program Information Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 207/223(F)) Federal Agency: Department of Housing and Urban Development (HUD) Assistance Listing #: 14.155 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria HUD Form-9250, Funds Authorizations, requires the Organization to deposit $1,842 into the replacement reserve account on a monthly basis. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended December 31, 2022 federal award program, we noted the Organization failed to make the required monthly deposits into the reserve for replacement account for all twelve months. The Organization deposited monthly $1,796 as opposed to the approved $1,842. S3800-032: Cause The Organization deposited the prior required monthly amount into the reserve for replacement account. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement to make required monthly deposits into the reserve for replacement account. S3800-035: Auditor Non-Compliance Code: N ? Reserve for replacements deposits S3800-040: Questioned Costs $868 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization deposited $21,236 onto the reserve for replacement account during the year ended December 31, 2022. The Organization was required to deposit $22,104 for the year. Per Missouri Housing Development Commission (HUD?s designee), the Organization was required to increase the monthly deposit to the reserve for replacement account from $1,796 to $1,842 effective June 1, 2019. The $868 questioned costs only accounts for the current fiscal year underfunding. S3800-080: Recommendation The Organization should deposit the shortfall of $868 into the reserve for replacement account, as well as the shortfall for 2019, 2020, and 2021, as soon as possible and ensure the process is being followed to deposit and reconcile the reserve for replacement account on a monthly basis. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date June 30, 2023 S3800-150: Response See Corrective Action Plan