Audit 22068

Finding Type Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.181 U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Finding Resolution Status In Process Information on Universe and Population Size The population includes all required deposits to the replacement reserve for fiscal year 2022. Sample Size Information N/A Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have made 12 monthly deposits of $716 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition The Organization failed to make the required reserve for replacements deposits in the current fiscal year. Cause The Organization failed to monitor the cash requirements of the reserve for replacement account as specified by the regulatory agreement. Effect or Potential Effect The replacement reserve account was underfunded in the current fiscal year by $5,728. Auditor Noncompliance Code N Reserve for replacements deposits Reporting Views of Responsible Officials Management agrees with the finding as reported. Context During testing of required deposits to the reserve for replacement account, it was noted the Organization only made 10 of the required 12 monthly deposits, causing the account to be underfunded by $5,728. Recommendation All required deposits should be made in accordance with the regulatory agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator Agree Completion Date December 31, 2023 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance.

Finding Type Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.181 U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Finding Resolution Status In Process Information on Universe and Population Size N/A Sample Size Information N/A Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have HUD authorization for all withdrawals from the replacement reserve account as required by the regulatory agreement. Statement of Condition Withdrawals totaling $10,000 were made from the replacement reserve without HUD authorization. Cause The Organization withdrew $10,000 from the replacement reserve account without obtaining prior approval from HUD. Effect or Potential Effect The unauthorized withdrawals caused the replacement reserve account to be underfunded at year end by $10,000. Auditor Noncompliance Code A Unauthorized withdrawals from replacement reserve account Reporting Views of Responsible Officials Management agrees with the finding as reported. Context During testing of required deposits to the reserve for replacement account, it was noted the Organization withdrew $10,000 without obtaining prior approval from HUD, causing the account to be underfunded at year end. Recommendation The Organization needs to make a deposit to correct underfunding of replacement reserve account in the amount $10,000. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should obtain approval from HUD prior to withdrawing funds from the replacement reserve. Response Indicator Agree Completion Date December 31, 2023 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit the underfunded amount of $10,000 to the replacement reserve account during fiscal year ended December 31, 2023.

Finding Type Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.181 U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Finding Resolution Status In Process Information on Universe and Population Size The population includes all required deposits to the replacement reserve for fiscal year 2022. Sample Size Information N/A Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have made 12 monthly deposits of $716 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition The Organization failed to make the required reserve for replacements deposits in the current fiscal year. Cause The Organization failed to monitor the cash requirements of the reserve for replacement account as specified by the regulatory agreement. Effect or Potential Effect The replacement reserve account was underfunded in the current fiscal year by $5,728. Auditor Noncompliance Code N Reserve for replacements deposits Reporting Views of Responsible Officials Management agrees with the finding as reported. Context During testing of required deposits to the reserve for replacement account, it was noted the Organization only made 10 of the required 12 monthly deposits, causing the account to be underfunded by $5,728. Recommendation All required deposits should be made in accordance with the regulatory agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator Agree Completion Date December 31, 2023 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance.

Finding Type Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.181 U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Finding Resolution Status In Process Information on Universe and Population Size N/A Sample Size Information N/A Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have HUD authorization for all withdrawals from the replacement reserve account as required by the regulatory agreement. Statement of Condition Withdrawals totaling $10,000 were made from the replacement reserve without HUD authorization. Cause The Organization withdrew $10,000 from the replacement reserve account without obtaining prior approval from HUD. Effect or Potential Effect The unauthorized withdrawals caused the replacement reserve account to be underfunded at year end by $10,000. Auditor Noncompliance Code A Unauthorized withdrawals from replacement reserve account Reporting Views of Responsible Officials Management agrees with the finding as reported. Context During testing of required deposits to the reserve for replacement account, it was noted the Organization withdrew $10,000 without obtaining prior approval from HUD, causing the account to be underfunded at year end. Recommendation The Organization needs to make a deposit to correct underfunding of replacement reserve account in the amount $10,000. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should obtain approval from HUD prior to withdrawing funds from the replacement reserve. Response Indicator Agree Completion Date December 31, 2023 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit the underfunded amount of $10,000 to the replacement reserve account during fiscal year ended December 31, 2023.