Audit 369357

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Hill Housing Facility - FINDING 2024-001: SECTION 8, ASSISTANCE LISTING NUMBER 14.195 Condition: The Project repaid a portion of the sponsor loan payable (Due to Related Party) without obtaining HUD approval. The total amount of the unauthorized sponsor loan payment was $130,019. Criteria: HUD approval should be obtained prior to making a sponsor loan repayment. Effect: The Project's cash balance is $130,019 less than it should be. Context: The Sponsor loan payable at December 31, 2024 was tested. The test determined that a portion of the sponsor loan was repaid without obtaining HUD approval. Questioned Costs - $130,019. Cause: The Project repaid a portion of the sponsor loan without obtaining HUD approval. Recommendation: The Sponsor should contact HUD to obtain permission to retain the unauthorized sponsor loan payments. Views of Responsible Officials and Planned Corrective Actions: The Sponsor will work with HUD to detemine if the $130,019 needs to be paid back to the Project. Total - Department of Housing and Urban Development $130,019, Non-compliance code - R

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the OTR - Arboretum West Apartments Facility FINDING 2024-004: SECTION 223(f), ASSISTANCE LISTING NUMBER 14.155 Condition: The Project paid the expense of another project under common management. Criteria: The Project should not pay the expenses of another project. Effect: The amount of the expense incorrectly paid was $1,250. Context: The Accounts and Notes Receivable account was tested at December 31, 2024. No sample was tested. Questioned Costs - $1,250, Cause: The Project mistakenly paid the invoice of another project under common management. Recommendation: The Project should carefully review invoices before payment to make sure it only pays the proper amount. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. The accounts payable staff will be reminded to be careful when entering invoices for payment. Total-Department of Housing and Urban Development - $1,250; Non-compliance code - R.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Rockford Supportive Housing Facility - FINDING 2024-002: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: One of the tenant files tested contained a mathematical error in computing household income in the process of computing the tenant share of monthly rent. Criteria: Household income should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files was selected for testing household income in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non-compliance did not have a financial effect. The details and results of the sample are as follows: Population - 20, Dollars - N/A; Sample - 2, Dollars N/A; Not in Compliance - 1, $99; Questioned Costs - $99. Cause: There was an error in interpreting some information provided by the tenant during the certification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Questioned Costs - Department of Housing and Urban Development - $99; Non-compliance code - R

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Waukegan Supportive Housing Facility FINDING 2024-003: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: The Project paid the expense of another project under common management. Criteria: The Project should not pay the expenses of another project. Effect: The amount of the expense incorrectly paid was $3,500. Context: The Accounts Receivable - Operations account was tested at December 31, 2024. No sample was tested. Questioned Costs - $3,500, Cause: The Project mistakenly paid the invoice of another project under common management. Recommendation: The Project should carefully review invoices before payment to make sure it only pays the proper amount. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. The accounts payable staff will be reminded to be careful when entering invoices for payment. Total-Department of Housing and Urban Development $3,500, Non-compliance code - R