Audit 351045

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Any withdrawal from the replacement reserve requires HUD approval evidenced by a signed HUD-9250. Condition During the year ended June 30, 2024, the project withdrew $100,000 from the replacement reserve without having obtained the appropriate approvals. Cause Procedures in place were not followed. Effect The withdrawal of $100,000 is an unauthorized withdrawal from the replacement reserve. Questioned Costs None Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure proper approval evidenced by a signed HUD-9250 before withdrawing funds from the replacement reserve. Management should obtain retroactive approval for the withdrawal. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account Finding resolution status: Resolved/In process. View of responsible officials and planned corrective actions Management will review and revise the protocols to avoid withdraws without prior HUD approval.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Expenses charged to the project should be for reasonable expenses necessary for the operation and maintenance of the project, unless prior authorization from HUD has been received. Condition During the year ended June 30, 2024, the project paid for expenses in the amount of $1,838 that were not related to the project. Cause Procedures were not being followed to ensure that charges to the project were limited to project operating costs. Effect The recording of $550 for a legal invoice and $1,288 for audit allocation of fees was not for reasonable expenses of the property and therefore considered to be questioned costs. Questioned Costs $1,838 Context Instances which were not part of a statistical sample. Identification as a Repeat Finding No. Recommendation Management should follow their internal controls and procedures to ensure only expenses of the project are recorded in the books and records. Auditor Noncompliance Code: G. Unauthorized loans from project assets Finding resolution status: Resolved View of responsible officials and planned corrective actions As of March 26, 2025, these amounts have been credited back to the company through the central disbursement accounting system. Management will implement reviews on a quarterly basis will be performed to ensure that only expenses related to the Corporation are included in expenses and will review indirect allocations to ensure only appropriate expenses approved in the HUD budget will be included in expenses.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Any withdrawal from the replacement reserve requires HUD approval evidenced by a signed HUD-9250. Condition During the year ended June 30, 2024, the project withdrew $100,000 from the replacement reserve without having obtained the appropriate approvals. Cause Procedures in place were not followed. Effect The withdrawal of $100,000 is an unauthorized withdrawal from the replacement reserve. Questioned Costs None Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure proper approval evidenced by a signed HUD-9250 before withdrawing funds from the replacement reserve. Management should obtain retroactive approval for the withdrawal. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account Finding resolution status: Resolved/In process. View of responsible officials and planned corrective actions Management will review and revise the protocols to avoid withdraws without prior HUD approval.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Expenses charged to the project should be for reasonable expenses necessary for the operation and maintenance of the project, unless prior authorization from HUD has been received. Condition During the year ended June 30, 2024, the project paid for expenses in the amount of $1,838 that were not related to the project. Cause Procedures were not being followed to ensure that charges to the project were limited to project operating costs. Effect The recording of $550 for a legal invoice and $1,288 for audit allocation of fees was not for reasonable expenses of the property and therefore considered to be questioned costs. Questioned Costs $1,838 Context Instances which were not part of a statistical sample. Identification as a Repeat Finding No. Recommendation Management should follow their internal controls and procedures to ensure only expenses of the project are recorded in the books and records. Auditor Noncompliance Code: G. Unauthorized loans from project assets Finding resolution status: Resolved View of responsible officials and planned corrective actions As of March 26, 2025, these amounts have been credited back to the company through the central disbursement accounting system. Management will implement reviews on a quarterly basis will be performed to ensure that only expenses related to the Corporation are included in expenses and will review indirect allocations to ensure only appropriate expenses approved in the HUD budget will be included in expenses.