Audit 370685

2024-1 – Management and Occupancy Review (MOR) Statement of Condition The US Department of Housing and Urban Development conducted a Management and Occupancy Review (MOR) on June 26, 2024. Their report, dated July 19, 2024, reflected an Unsatisfactory rating related to Leasing and Occupancy and General Management Practices as well as a Below Average rating on Maintenance and Standard Operating Procedure. However, the report did give a satisfactory or above average rating related to the other areas covered in the report. Criteria The Housing Assistance Payments (HAP) Contract requires compliance regarding the physical building and tenant files to be in accordance with the contract requirements. Effect Failure to comply with the Regulatory Agreement and the HAP contract is a violation of HUD regulations. Cause The property was in the process of transitioning the management over to a new management agent, making it more difficult to maintain effective policies and procedures related to the tenant files and recertifications. Recommendation Management must perform the corrective actions as required by the MOR by the target completion date. Management/Owner Response The Board agrees with the findings is taking action to correct the findings and implement the recommendations.

2024-2 – Management and Maintenance of Financial and Accounting Records Statement of Condition Management is required to maintain the accounting books and records in accordance with generally accepted accounting principles and HUD regulations. During the period November 1, 2024 through December 31, 2024, we were unable to obtain sufficient accounting records maintained in accordance with generally accepted accounting principles and HUD regulations as well as sufficient appropriate audit evidence to enable us to express an opinion on the financial statements. Criteria Management is required to maintain the accounting books and records in accordance with generally accepted accounting principles and HUD regulations. Effect Failure to properly/adequately maintain accounting records is a violation of HUD regulations and resulted in a disclaimer of opinion for the 2024 audit. Cause The Board transitioned the management of the property over to a new management agent beginning November 1, 2024 and the new management agent did not provide or maintain the accounting records in accordance with generally accepted accounting principles and HUD regulations. Recommendation The Board and management should hire an accountant with HUD experience to help correct the books and records in order to comply with HUD regulations and to conform with generally accepted accounting principles. Management/Owner Response The Board agrees with the findings is taking action to correct the findings and implement the recommendations.