Audit 25670

S3800-010: Finding Reference Number 2022-001 Program Information S3800-011: Federal Program Supportive Housing for the Elderly - Section 202 Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: COVID-19 Identification: Pass-through Entity: None CFDA #: 14.157 Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Award Finding S3800-016: Finding Resolution Status In-process S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Repeat Finding Number N/A S3800-020: Criteria HUD Handbook 4370.2 REV-1 ?Financial Operations and Accounting Procedures for Insured Multifamily Projects? Chapter 2-2 states in pertinent part that the books and records should be maintained in accordance with Generally Accepted Accounting Principles (GAAP). Section 9(d) of the Organization?s Regulatory Agreement states the books and records should be maintained in accordance with the requirements of HUD. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended March 31, 2022 federal award program, we noted that management had not recorded a material audit entry for depreciation calculated during the prior year audit. As a result, the financial statements were materially misstated and not in compliance with GAAP. S3800-032: Cause The Organization?s engages the audit firm to perform the depreciation calculation at the time of the audit due to not having a fixed asset system in which to easily perform the calculation. The Organization failed to record the prior year entry causing the financials to be materially misstated. The Organization does not have adequate internal controls over financial reporting. S3800-033: Effect or Potential Effect The Organization is not in compliance with requirements to maintain books and records according to GAAP. S3800-035: Auditor Non-Compliance Code S ? Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agreed with auditor?s finding. S3800-050: Context Management did not record prior year depreciation of fixed assets. S3800-080: Recommendation Management should ensure that annual depreciation entry is recorded when it is provided by the audit firm. Management should ensure accounting records agree to audited financial statements. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Concur S3800-130: Response Indicator Agree S3800-140: Completion Date December 31, 2022 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-002 Program Information S3800-011: Federal Program Supportive Housing for the Elderly - Section 202 Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: COVID-19 Identification: Pass-through Entity: None CFDA #: 14.157 Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Federal Award Finding S3800-016: Finding Resolution Status In-progress S3800-017: Information on Universe Population Size NA S3800-018: Sample Size Information NA S3800-019: Repeat Finding Number NA S3800-020: Criteria The Project Rental Assistance Contract (PRAC) with the U.S. Department of Housing and Urban Development (HUD) approved a rent increase effective April 1, 2021. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended March 31, 2022 we noted the approved rent increase was not implemented and rents were charged at the prior year?s rates. S3800-032: Cause The Organization does not have adequate internal controls to ensure rents charged are in accordance with most recent PRAC contract. S3800-033: Effect or Potential Effect The Organization was not in compliance with the requirements of HUD related to rental assistance contract. S3800-035: Auditor Non-Compliance Code: Z ? Other S3800-040: Questioned Costs $31,871 S3800-045: Reporting Views of Responsible Officials Management agreed with auditor?s finding S3800-050: Context The Organization did not charge rent in accordance with most recent HUD approved rates. S3800-080: Recommendation The Organization should implement a process to ensure that rent is charged in accordance with the most recent PRAC authorized by HUD. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Concur S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date August 31, 2022 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-001 Program Information S3800-011: Federal Program Supportive Housing for the Elderly - Section 202 Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: COVID-19 Identification: Pass-through Entity: None CFDA #: 14.157 Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Award Finding S3800-016: Finding Resolution Status In-process S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Repeat Finding Number N/A S3800-020: Criteria HUD Handbook 4370.2 REV-1 ?Financial Operations and Accounting Procedures for Insured Multifamily Projects? Chapter 2-2 states in pertinent part that the books and records should be maintained in accordance with Generally Accepted Accounting Principles (GAAP). Section 9(d) of the Organization?s Regulatory Agreement states the books and records should be maintained in accordance with the requirements of HUD. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended March 31, 2022 federal award program, we noted that management had not recorded a material audit entry for depreciation calculated during the prior year audit. As a result, the financial statements were materially misstated and not in compliance with GAAP. S3800-032: Cause The Organization?s engages the audit firm to perform the depreciation calculation at the time of the audit due to not having a fixed asset system in which to easily perform the calculation. The Organization failed to record the prior year entry causing the financials to be materially misstated. The Organization does not have adequate internal controls over financial reporting. S3800-033: Effect or Potential Effect The Organization is not in compliance with requirements to maintain books and records according to GAAP. S3800-035: Auditor Non-Compliance Code S ? Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agreed with auditor?s finding. S3800-050: Context Management did not record prior year depreciation of fixed assets. S3800-080: Recommendation Management should ensure that annual depreciation entry is recorded when it is provided by the audit firm. Management should ensure accounting records agree to audited financial statements. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Concur S3800-130: Response Indicator Agree S3800-140: Completion Date December 31, 2022 S3800-150: Response See Corrective Action Plan

S3800-010: Finding Reference Number 2022-002 Program Information S3800-011: Federal Program Supportive Housing for the Elderly - Section 202 Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: COVID-19 Identification: Pass-through Entity: None CFDA #: 14.157 Type of Compliance Finding: N ? Special Tests and Provisions S3800-015: Type of Finding Federal Award Finding S3800-016: Finding Resolution Status In-progress S3800-017: Information on Universe Population Size NA S3800-018: Sample Size Information NA S3800-019: Repeat Finding Number NA S3800-020: Criteria The Project Rental Assistance Contract (PRAC) with the U.S. Department of Housing and Urban Development (HUD) approved a rent increase effective April 1, 2021. S3800-030: Statement of Condition During our audit of the Organization?s fiscal year ended March 31, 2022 we noted the approved rent increase was not implemented and rents were charged at the prior year?s rates. S3800-032: Cause The Organization does not have adequate internal controls to ensure rents charged are in accordance with most recent PRAC contract. S3800-033: Effect or Potential Effect The Organization was not in compliance with the requirements of HUD related to rental assistance contract. S3800-035: Auditor Non-Compliance Code: Z ? Other S3800-040: Questioned Costs $31,871 S3800-045: Reporting Views of Responsible Officials Management agreed with auditor?s finding S3800-050: Context The Organization did not charge rent in accordance with most recent HUD approved rates. S3800-080: Recommendation The Organization should implement a process to ensure that rent is charged in accordance with the most recent PRAC authorized by HUD. S3800-090: Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations Concur S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date August 31, 2022 S3800-150: Response See Corrective Action Plan