Audit 303896

S3800-010 Finding reference number 2023-001 S3800-011 Title and AL number of federal program Supportive Housing for the Elderly #14.157 S3800-015 Type of finding Federal Award Finding and Internal Control over Compliance S3800-016 Finding resolution status Completed S3800-017 Information on universe population size not applicable S3800-018 Sample size information not applicable S3800-019 Identification of repeat finding and finding reference number not applicable S3800-020 Criteria The Regulatory Agreement between HUD and the owner stipulates that project funds may be used only for expenses that are reasonable and necessary to the operation of the project. S3800-030 Statement of condition The Organization advanced funds to the management agent that was not related to reasonable and necessary operations of the project and included $55,000 from the replacement reserve without HUD approval. S3800-032 Cause RAD for PRAC closing S3800-033 Effect or potential effect Cash may be unavailable to meet reasonable and necessary obligations of the project. S3800-035 Auditor non-compliance code G - Unauthorized loans from project assets S3800-037 FHA/Contract number 062-EE021 S3800-040 Questioned costs $90,016 S3800-045 Reporting views of responsible officials The loans were necessary to facilitate the HUD endorsed RAD for PRAC closing on August 3, 2023. S3800-080 Recommendation Management should monitor internal controls over compliance and receive HUD approval before approving future loans from project assets and transferring funds from the replacement reserve. Management should contact HUD to determine if further action due to the RAD for PRAC closing and the cancellation of legal documents between the owner and HUD. S3800-090 Auditors' summary of the auditee's comments on the findings and recommendations The responsible officials anticipated that the Regulatory Agreement would be subsequently canceled as part of the HUD endorsed RAD for PRAC closing on August 3, 2003 and the loan was reasonable in order to ensure the closing was completed as scheduled. S3800-130 Response indicator Agree S3800-140 Anticipated Completion Date August 3, 2023 S3800-150 Response The RAD for PRAC closing on August 3, 2023 and subsequent canceled Regulatory Agreement between HUD and the owner.

S3800-010 Finding reference number 2023-001 S3800-011 Title and AL number of federal program Supportive Housing for the Elderly #14.157 S3800-015 Type of finding Federal Award Finding and Internal Control over Compliance S3800-016 Finding resolution status Completed S3800-017 Information on universe population size not applicable S3800-018 Sample size information not applicable S3800-019 Identification of repeat finding and finding reference number not applicable S3800-020 Criteria The Regulatory Agreement between HUD and the owner stipulates that project funds may be used only for expenses that are reasonable and necessary to the operation of the project. S3800-030 Statement of condition The Organization advanced funds to the management agent that was not related to reasonable and necessary operations of the project and included $55,000 from the replacement reserve without HUD approval. S3800-032 Cause RAD for PRAC closing S3800-033 Effect or potential effect Cash may be unavailable to meet reasonable and necessary obligations of the project. S3800-035 Auditor non-compliance code G - Unauthorized loans from project assets S3800-037 FHA/Contract number 062-EE021 S3800-040 Questioned costs $90,016 S3800-045 Reporting views of responsible officials The loans were necessary to facilitate the HUD endorsed RAD for PRAC closing on August 3, 2023. S3800-080 Recommendation Management should monitor internal controls over compliance and receive HUD approval before approving future loans from project assets and transferring funds from the replacement reserve. Management should contact HUD to determine if further action due to the RAD for PRAC closing and the cancellation of legal documents between the owner and HUD. S3800-090 Auditors' summary of the auditee's comments on the findings and recommendations The responsible officials anticipated that the Regulatory Agreement would be subsequently canceled as part of the HUD endorsed RAD for PRAC closing on August 3, 2003 and the loan was reasonable in order to ensure the closing was completed as scheduled. S3800-130 Response indicator Agree S3800-140 Anticipated Completion Date August 3, 2023 S3800-150 Response The RAD for PRAC closing on August 3, 2023 and subsequent canceled Regulatory Agreement between HUD and the owner.