Audit 27624

Finding reference number: #2022-001 Assistance Listing title and number (Federal award identification number and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: Q - Failure to make mortgage payments Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Noncompliance Information: See statement of condition #2022-001 for noncompliance information. Statistically valid sample: Not applicable Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: Not applicable Repeat Finding: Yes. See Finding #2021-001. Statement of condition #2022-001: The Corporation's Flexible Subsidy Loan was due in full upon maturity of the Corporation's Section 202 mortgage loan, which occurred in March 2017. As of June 30, 2022, the Flexible Subsidy Loan has not been repaid, and the Corporation is in technical default on the Flexible Subsidy Loan. Criteria: Pursuant to the terms of the Section 201 Flexible Subsidy Loan agreement, the Flexible Subsidy Loan is due in full upon maturity of the Section 202 mortgage loan. Effect: The Corporation is not in compliance with the Flexible Subsidy Loan agreement. Cause: The Flexible Subsidy Loan was not repaid in full upon maturity. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request. Recommendation: Management should continue communicating with HUD in order to obtain approval for the deferment request for the Section 201 Flexible Subsidy Loan. Completion date: June 30, 2023 Management's response: Agree. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request.

Finding reference number: #2022-002 Assistance Listing title and number (federal award identification and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: B - Failure to make required residual receipt deposit Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: Not applicable. Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: $27,293 Statement of condition #2022-002 (Assistance Listing 14.164): The Corporation's required deposit into the residual receipts account of $27,293 per the June 30, 2021 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited within 90 days of the fiscal year end. Criteria: Pursuant to the HUD regulations, surplus cash is required to be deposited into a separate residual receipts fund within 90 days after the fiscal period end. Effect: The Corporation is not in compliance with the terms of the Section 202 Regulatory Agreement or communications that the Corporation has received from HUD. Cause: The Corporation did not make the required deposit within 90 days of the fiscal year end. Recommendation: Management should make all required residual receipts deposits per the annual Computation of Surplus Cash, Distributions and Residual Receipts within 90 days after the fiscal year end. Completion date: February 16, 2022 Management response: Agree. Management deposited $27,293 into the residual receipts fund on February 16, 2022. No further action is required.

Finding reference number: #2022-001 Assistance Listing title and number (Federal award identification number and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: Q - Failure to make mortgage payments Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Noncompliance Information: See statement of condition #2022-001 for noncompliance information. Statistically valid sample: Not applicable Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: Not applicable Repeat Finding: Yes. See Finding #2021-001. Statement of condition #2022-001: The Corporation's Flexible Subsidy Loan was due in full upon maturity of the Corporation's Section 202 mortgage loan, which occurred in March 2017. As of June 30, 2022, the Flexible Subsidy Loan has not been repaid, and the Corporation is in technical default on the Flexible Subsidy Loan. Criteria: Pursuant to the terms of the Section 201 Flexible Subsidy Loan agreement, the Flexible Subsidy Loan is due in full upon maturity of the Section 202 mortgage loan. Effect: The Corporation is not in compliance with the Flexible Subsidy Loan agreement. Cause: The Flexible Subsidy Loan was not repaid in full upon maturity. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request. Recommendation: Management should continue communicating with HUD in order to obtain approval for the deferment request for the Section 201 Flexible Subsidy Loan. Completion date: June 30, 2023 Management's response: Agree. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request.

Finding reference number: #2022-002 Assistance Listing title and number (federal award identification and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: B - Failure to make required residual receipt deposit Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: Not applicable. Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: $27,293 Statement of condition #2022-002 (Assistance Listing 14.164): The Corporation's required deposit into the residual receipts account of $27,293 per the June 30, 2021 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited within 90 days of the fiscal year end. Criteria: Pursuant to the HUD regulations, surplus cash is required to be deposited into a separate residual receipts fund within 90 days after the fiscal period end. Effect: The Corporation is not in compliance with the terms of the Section 202 Regulatory Agreement or communications that the Corporation has received from HUD. Cause: The Corporation did not make the required deposit within 90 days of the fiscal year end. Recommendation: Management should make all required residual receipts deposits per the annual Computation of Surplus Cash, Distributions and Residual Receipts within 90 days after the fiscal year end. Completion date: February 16, 2022 Management response: Agree. Management deposited $27,293 into the residual receipts fund on February 16, 2022. No further action is required.