Audit 33057

2022 001 Finding Type: Immaterial noncompliance with major program requirements Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.157 U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (Section 202) Finding Resolution Status Resolved Information on Universe and Population Size Universe is the HUD required deposits to the replacement reserve account and the population is all 12 deposits, as required by HUD. Sample Size Information 12 All deposits required to be made into the replacement reserve account Identification of Repeat Finding and Finding Reference Number N/A Criteria The Corporation should have made 9 monthly deposits of $1,350 and 3 monthly deposits of $10,583 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition The Corporation failed to make the required reserve for replacements deposits in 2022. Cause The Corporation did not have funds available to comply with the cash requirements of the reserve for replacement account as specified by HUD's approved and required deposits to the regulatory agreement. Effect or Potential Effect The replacement reserve account was underfunded in the current fiscal year by $31,749. Auditor Noncompliance Code N Reserve for replacements deposits Reporting Views of Responsible Officials The Corporation agrees with the finding as reported. Context During testing of compliance with cash funding requirements of the replacement reserve account, an instance of noncompliance was noted as three required monthly payments were not made during 2022. The Corporation made a deposit that included $31,749 to properly fund the replacement reserve for the deposits that were not made during 2022. Recommendation All required deposits should be made in accordance with the regulatory agreement and HUD approved changes to the required monthly deposits. 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 February 7, 2023 Response Management acknowledges and agrees that the Corporation was not in compliance with the replacement reserve monthly deposit requirements at December 31, 2022, and management will follow HUD's guidelines and requirement for replacement reserve monthly deposits. The Corporation was not able to make the required deposits because the subsidy payments for the rent increase, which the increased deposit was based, were not received until January 2023.

2022 001 Finding Type: Immaterial noncompliance with major program requirements Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.157 U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (Section 202) Finding Resolution Status Resolved Information on Universe and Population Size Universe is the HUD required deposits to the replacement reserve account and the population is all 12 deposits, as required by HUD. Sample Size Information 12 All deposits required to be made into the replacement reserve account Identification of Repeat Finding and Finding Reference Number N/A Criteria The Corporation should have made 9 monthly deposits of $1,350 and 3 monthly deposits of $10,583 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition The Corporation failed to make the required reserve for replacements deposits in 2022. Cause The Corporation did not have funds available to comply with the cash requirements of the reserve for replacement account as specified by HUD's approved and required deposits to the regulatory agreement. Effect or Potential Effect The replacement reserve account was underfunded in the current fiscal year by $31,749. Auditor Noncompliance Code N Reserve for replacements deposits Reporting Views of Responsible Officials The Corporation agrees with the finding as reported. Context During testing of compliance with cash funding requirements of the replacement reserve account, an instance of noncompliance was noted as three required monthly payments were not made during 2022. The Corporation made a deposit that included $31,749 to properly fund the replacement reserve for the deposits that were not made during 2022. Recommendation All required deposits should be made in accordance with the regulatory agreement and HUD approved changes to the required monthly deposits. 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 February 7, 2023 Response Management acknowledges and agrees that the Corporation was not in compliance with the replacement reserve monthly deposit requirements at December 31, 2022, and management will follow HUD's guidelines and requirement for replacement reserve monthly deposits. The Corporation was not able to make the required deposits because the subsidy payments for the rent increase, which the increased deposit was based, were not received until January 2023.