Audit 32373

Finding reference number: #2022-01 Assistance Listing title and number (federal award identification and par): Section 207 pursuant to Section 223(f) of the National Housing Act Corrective action completed: Auditor non-compliance code: A - Unauthorized withdrawal from replacement reserve Finding resolution status: Resolved Universe population size: The universe population is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $19,627 Statement of condition #2022-001: During the year ended December 31, 2022, the Property withdrew $19,627 from the reserve for replacements account without HUD authorization. Criteria: Pursuant to item 10d of the Regulatory Agreement, disbursements from the reserve for replacements shall only be made after consent, in writing, of HUD, in its sole discretion, or as otherwise approved by HUD pursuant to program obligations. Effect or potential effect: The Company is not in compliance with the Regulatory Agreement. The Property's cash position as of December 31, 2022 has been reduced by $19,627. Cause: Management inadvertently submitted the HUD Form 9250 for an adjacent Property to the Lender. Recommendation: Management should deposit $19,627 to the reserve for replacements account. Completion date: January 6, 2023 Management response: Management agrees with the recommendation. On January 6, 2023, $19,627 was deposited to the reserve for replacements account. No further action is necessary.

Finding reference number: #2022-01 Assistance Listing title and number (federal award identification and par): Section 207 pursuant to Section 223(f) of the National Housing Act Corrective action completed: Auditor non-compliance code: A - Unauthorized withdrawal from replacement reserve Finding resolution status: Resolved Universe population size: The universe population is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $19,627 Statement of condition #2022-001: During the year ended December 31, 2022, the Property withdrew $19,627 from the reserve for replacements account without HUD authorization. Criteria: Pursuant to item 10d of the Regulatory Agreement, disbursements from the reserve for replacements shall only be made after consent, in writing, of HUD, in its sole discretion, or as otherwise approved by HUD pursuant to program obligations. Effect or potential effect: The Company is not in compliance with the Regulatory Agreement. The Property's cash position as of December 31, 2022 has been reduced by $19,627. Cause: Management inadvertently submitted the HUD Form 9250 for an adjacent Property to the Lender. Recommendation: Management should deposit $19,627 to the reserve for replacements account. Completion date: January 6, 2023 Management response: Management agrees with the recommendation. On January 6, 2023, $19,627 was deposited to the reserve for replacements account. No further action is necessary.